Ichor
Annual Report 2017

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D. C. 20549 FORM 10‑K (Mark One)☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 29, 2017or☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to Commission File Number 001‑37961 ICHOR HOLDINGS, LTD.(Exact name of registrant as specified in its charter) Cayman Islands 001-37961 Not Applicable(State or other jurisdiction ofincorporation) (Commission File Number) (IRS Employer Identification No.)3185 Laurelview Ct.Fremont, California 94538(Address of principal executive offices, including Zip Code)(510) 897-5200(Registrant's telephone number, including area code)Not Applicable(Former name or former address, if changed since last report) Title of each class Name of exchange on which registeredOrdinary Shares, $0.0001 par value The NASDAQ Stock Market, LLCSecurities registered pursuant to Section 12(g) of the Act:None Indicate by check mark if the registrant is a well‑known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and postedpursuant to Rule 405 of Regulation S‑T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post suchfiles). Yes ☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S‑K (§229.405 of this chapter) is not contained herein, and will not be contained, to thebest of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10‑K or any amendment to this Form 10‑K. ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, or a smaller reporting company. See the definitions of “largeaccelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b‑2 of the Exchange Act. Large accelerated filer☐ Accelerated filer☒Non-accelerated filer☐(Do not check if a smaller reporting company)Smaller reporting company☐Emerging Growth Company☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Act). Yes ☐ No ☒There were 26,254,862 ordinary shares, $0.0001 par value, outstanding as of March 6, 2018. The aggregate market value of ordinary shares held by non-affiliates was $260,085,228as of March 6, 2018.DOCUMENTS INCORPORATED BY REFERENCEThe information required by Part III of Form 10‑K is incorporated herein by reference to the registrant’s definitive Proxy Statement relating to its 2018 General Meeting, which will befiled with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year.TABLE OF CONTENTS PagePART I ITEM 1.BUSINESS1ITEM 1A.RISK FACTORS9ITEM 1B.UNRESOLVED STAFF COMMENTS25ITEM 2.PROPERTIES25ITEM 3.LEGAL PROCEEDINGS25ITEM 4.MINE SAFETY DISCLOSURES25 PART II ITEM 5.MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASESOF EQUITY SECURITIES26ITEM 6.SELECTED FINANCIAL DATA28ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS29ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK46ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA47ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE47ITEM 9A.CONTROLS AND PROCEDURES47ITEM 9B.OTHER INFORMATION48 PART III ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE48ITEM 11.EXECUTIVE COMPENSATION48ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDERMATTERS48ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE49ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES49 PART IV ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES49ITEM 16.FORM 10-K SUMMARY49 EXHIBIT INDEX SIGNATURES CAUTIONARY STATEMENT CONCERNING FORWARD‑LOOKING STATEMENTSThis report contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical factincluded in this report are forward-looking statements. These statements relate to analyses and other information, which are based on forecasts of futureresults and estimates of amounts not yet determinable. These statements also relate to our future prospects, developments and business strategies. Theseforward-looking statements are identified by the use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,”“plan,” “predict,” “project,” “will” and similar terms and phrases, including references to assumptions. However, these words are not the exclusive means ofidentifying such statements. These statements are contained in many sections of this report, including those entitled “Business” and “Management’sDiscussion and Analysis of Financial Condition and Results of Operations.” Although we believe that our plans, intentions and expectations reflected in orsuggested by such forward-looking statements are reasonable, we cannot assure you that we will achieve those plans, intentions or expectations. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected.Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under the sections entitled“Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements contained in thisreport under the heading “Risk Factors,” as well as other cautionary statements that are made from time to time in our other filings with the Securities andExchange Commission and public communications. You should evaluate all forward-looking statements made in this report in the context of these risks anduncertainties.We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you thatwe will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us orour operations in the way we expect. The forward-looking statements included in this report are made only as of the date hereof. We undertake no obligationto publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.  PART IITEM 1. BUSINESSUnless expressly indicated or the context requires otherwise, the terms “Ichor,” “Company,” “we,” “us,” “our,” and similar terms in this report refer to IchorHoldings, Ltd. and its consolidated subsidiaries.We use a 52 or 53 week fiscal year ending on the last Friday in December. The years ended December 29, 2017, December 30, 2016, and December 25, 2015were 52 weeks, 53 weeks, and 52 weeks, respectively. All references to 2017, 2016, and 2015 are references to fiscal years unless explicitly stated otherwise.Company OverviewWe are a leader in the design, engineering and manufacturing of critical fluid delivery subsystems and components for semiconductor capital equipment. Ourproduct offerings include gas and chemical delivery subsystems, collectively known as fluid delivery subsystems, which are key elements of the process toolsused in the manufacturing of semiconductor devices. Our gas delivery subsystems deliver, monitor and control precise quantities of the specialized gasesused in semiconductor manufacturing processes such as etch and deposition. Our chemical delivery subsystems precisely blend and dispense the reactiveliquid chemistries used in semiconductor manufacturing processes such as chemical-mechanical planarization, electroplating, and cleaning. We alsomanufacture precision machined components, weldments, and proprietary products for use in fluid delivery systems for direct sales to our customers. Thisvertically integrated portion of our business is primarily focused on metal and plastic parts that are used in gas and chemical systems, respectively.Fluid delivery subsystems ensure accurate measurement and uniform delivery of specialty gases and chemicals at critical steps in the semiconductormanufacturing processes. Any malfunction or material degradation in fluid delivery reduces yields and increases the likelihood of manufacturing defects inthese processes. Historically, semiconductor original equipment manufacturers, or OEMs, internally designed and manufactured the fluid delivery subsystemsused in their process tools. Currently, most OEMs outsource all or a portion of the design, engineering and manufacturing of their gas delivery subsystems toa few specialized suppliers, including us. Additionally, many OEMs are also increasingly outsourcing the design, engineering and manufacturing of theirchemical delivery subsystems due to the increased fluid expertise required to manufacture these subsystems. Outsourcing these subsystems has allowedOEMs to leverage the suppliers’ highly specialized engineering, design and production skills while focusing their internal resources on their own value-added processes. We believe that this outsourcing trend has enabled OEMs to reduce their fixed costs and development time, as well as provided significantgrowth opportunities for specialized subsystems suppliers like us.Our goal is to be a leading supplier of outsourced fluid delivery subsystems and components to OEMs engaged in manufacturing capital equipment toproduce semiconductors and to leverage our technology to expand our addressable markets. To achieve this goal, we engage with our customers early in theirdesign and development processes and utilize our deep engineering resources and operating expertise to jointly create innovative and advanced solutionsthat meet the current and future needs of our customers. These collaborations frequently involve our engineers working at our customers’ sites and serving asan extension of our customers’ product design teams. We employ this approach with two of the largest manufacturers of semiconductor capital equipment inthe world. We believe this approach enables us to design subsystems that meet the precise specifications our customers demand, allows us to often be the solesupplier of these subsystems during the initial production ramp and positions us to be the preferred supplier for the full five to ten-year lifespan of the processtool.The broad technical expertise of our engineering team, coupled with our early customer engagement approach, enables us to offer innovative and reliablesolutions to complex fluid delivery challenges. With two decades of experience developing complex fluid delivery subsystems and meeting the constantlychanging production requirements of leading semiconductor OEMs, we have developed expertise in fluid delivery that we offer to our OEM customers. Inaddition, our capital efficient model and the integration of our business systems with those of our customers provides us the flexibility to fulfill increaseddemand and meet changing customer requirements with relatively low levels of capital expenditures. With an aim to superior customer service, we have aglobal footprint with many facilities strategically located in close proximity to our customers. We have long standing relationships with top tier OEMcustomers, including Lam Research and Applied Materials, which were our two largest customers by sales in 2017.1  We grew our revenue from continuing operations by 62% to $655.9 million in 2017 from $405.7 million in 2016 (hereinafter, all references to “sales” or“revenue” relates to sales from continuing operations, unless explicitly stated otherwise). We generated net income from continuing operations of$56.9 million in 2017 and $20.8 million in 2016. We generated adjusted net income from continuing operations of $65.1 million in 2017 and $31.6 millionin 2016. See Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations, Non-GAAP Results for a discussion ofadjusted net income from continuing operations, an accompanying presentation of the most directly comparable financial measure calculated in accordancewith generally accepted accounting principles in the United States, net income from continuing operations, and a reconciliation of the differences betweenadjusted net income from continuing operations and net income from continuing operations.Our Competitive StrengthsAs a leader in the fluid delivery industry, we believe that our key competitive strengths include the following:Deep Fluids Engineering ExpertiseWe believe that our engineering team, comprised of chemical engineers, mechanical engineers and software and systems engineers, has positioned us toexpand the scope of our solutions, provide innovative subsystems and strengthen our incumbent position at our OEM customers. Many of our engineers areindustry veterans and have spent a significant portion of their careers at our customers, bringing first-hand expertise and a heightened understanding of ourcustomers’ needs. Our engineering team acts as an extension of our customers’ product development teams, providing our customers with technical expertisethat is outside of their core competencies.Early Engagement with Customers on Product DevelopmentWe seek to engage with our customers and potential customers very early in their process for new product development. We believe this approach enables usto collaborate on product design, qualification, manufacturing and testing in order to provide a comprehensive, customized solution. Through earlyengagement during the complex design stages, our engineering team gains early insight into our customers’ technology roadmaps which enables us topioneer innovative and advanced solutions. In many cases our early engagement with our customers enables us to be the sole source supplier when theproduct is initially introduced.Long History and Strong Relationships with Top Tier CustomersWe have established deep relationships with top tier OEMs such as Lam Research and Applied Materials, which were our two largest customers by sales in2017. Our customers are global leaders by sales in the increasingly concentrated semiconductor capital equipment industry. Our existing relationships withour customers have enabled us to effectively compete for new fluid delivery subsystems for our customers’ next generation products in development. Weleverage our deep rooted existing customer relationships with these market leaders to penetrate new business opportunities created through industryconsolidation. Our close collaboration with them has contributed to our established market position and several key supplier awards.Operational Excellence with Scale to Support the Largest CustomersOver our 18 year history of designing and building gas delivery systems, we have developed deep capabilities in operations. We have strategically locatedour manufacturing facilities near our customers’ locations in order to provide fast and efficient responses to new product introductions, and accommodateconfiguration or design changes late in the manufacturing process. We also added significant capacity in our Singapore facility to support high volumeproducts and will continue to add capacity as needed to support future growth. In addition to providing high quality and reliable fluid delivery subsystems,one of our principal strategies is delivering the lead-times that provide our customers the required flexibility needed in their production processes. We haveaccomplished this by investing in manufacturing systems and processes and an efficient supply chain. Our focus on operational efficiency and flexibilityallows us to reduce manufacturing cycle times in order to respond quickly to customer requests and lead-times that are often less than four weeks.2  Capital Efficient and Scalable Business ModelIn general, our business is not capital intensive and we are able to grow sales with a low investment in property, plant and equipment. In 2017, 2016, and2015, our total capital expenditures were $8.2 million, $4.3 million, and $1.4 million, respectively. The semiconductor capital equipment market hashistorically been cyclical. We have structured our business to minimize fixed manufacturing overhead and operating expenses to enable us to grow netincome at a higher rate than sales during periods of growth. Conversely, our low fixed cost approach allows us to minimize the impact of cyclical downturnson our net income, but results in a lower level of gross margin leverage or improvement as a percentage of sales in times of increased demand. For example,from 2014 to 2017, sales grew at a compound annual growth rate, or CAGR, of 38% while adjusted net income from continuing operations grew at a CAGR of77%. Conversely, our low fixed cost approach allows us to minimize the impact of cyclical downturns on our net income, but results in a smaller increase ingross margin as a percentage of sales in times of increased demand.Our Growth StrategyOur objective is to enhance our position as a leader in providing fluid delivery solutions, including subsystems, components, and tool refurbishment, to ourcustomers by leveraging our core strengths. The key elements of our growth strategy are:Grow Our Market Share within Existing Customer BaseWe intend to grow our position with existing customers by continuing to leverage our specialized engineering talent and early collaboration approach withOEMs to foster long-term relationships. Each of our customers produces many different process tools for various process steps. At each customer, we are anoutsourced supplier of fluid delivery subsystems for a subset of their entire process tool offerings. We are constantly looking to expand our market share atour existing customers. We believe that our early collaborative approach with customers positions us to deliver innovative and dynamic solutions, offertimely deployment and meet competitive cost targets, further enhancing our brand reputation. Through our recent acquisitions of a weldment company and aprecision machining company completed in July and December 2017, respectively, as well as our 2016 acquisition of a plastic machining & fabricationcompany, we expanded our served market and entered the market for chemical delivery subsystems for wet process tools where we had only limitedengagement in the past. Using this and our existing engineering capability, we developed a liquid delivery module and were qualified on a wet processequipment system at one of our two largest customers who is a market leader in this space.Grow Our Total Available Market at Existing Customers with Expanded Product OfferingsWe continue to work with our existing core customers on additional opportunities, including chemical delivery, one of our important potential growth areas.We believe that wet processes, clean and electro chemical deposition, or ECD, that require precise chemical delivery are currently an underpenetrated marketopportunity for us. By leveraging our existing customer relationships and strong reputation in fluid mechanics, we intend to increase our chemical deliverymodule market share and introduce additional related products. Through our recent acquisitions of a weldment company and a precision machining companycompleted in July and December 2017, respectively, as well as our 2016 acquisition of a plastic machining & fabrication company, we expanded our servedmarket and entered the market for chemical delivery subsystems. The acquisitions allow us to manufacture and assemble the complex plastic and metalproducts and precision machined components for the semiconductor equipment, aerospace, and general-industrial industries.Expand Our Total Customer Base within Fluid Delivery MarketWe have expanded our customer base and are currently a supplier for of gas delivery systems for a leading lithography system manufacturer in addition to aleading ALD system manufacturer. We continue to actively engage with new customers that are considering outsourcing their gas and chemical deliveryneeds.Continue to Improve Our Manufacturing Process EfficiencyWe continually strive to improve our processes to reduce our manufacturing process cycle time, improve our ability to respond to short lead-time and lastminute configuration changes, reduce our manufacturing costs, and improve our inventory efficiency requirements in order to improve profitability and makeour product offerings more attractive to new and existing customers.3  Our Products and ServicesWe are a leader in the design, engineering and manufacturing of critical fluid delivery subsystems. Our product and service offerings are classified in thefollowing categories:Gas Delivery SubsystemsGas delivery is among the most technologically complex functions in semiconductor capital equipment and is used to deliver, monitor and control precisequantities of the vapors and gases critical to the manufacturing process. Our gas delivery systems consist of a number of gas lines, each controlled by a seriesof mass flow controllers, regulators, pressure transducers and valves, and an integrated electronic control system. Our gas delivery subsystems are primarilyused in equipment for “dry” manufacturing processes, such as etch, chemical vapor deposition, physical vapor deposition, epitaxy and strip. Chemical Delivery SubsystemsOur chemical delivery subsystems are used to precisely blend and dispense reactive chemistries and colloidal slurries critical to the specific “wet” front-endprocess, such as wet clean, electro chemical deposition (“ECD”), and chemical-mechanical planarization (“CMP”). In addition to the chemical deliverysubsystem, we also develop the process modules that apply the various chemicals directly to the wafer in a process and application-unique manner to createthe desired chemical reaction.4  The image below shows a typical wet-process front end semiconductor tool, with a chemical delivery subsystem and corresponding application processmodule highlighted: WeldmentsOur complete offering of weldments support the delivery of fluids through the process tool. We have developed both automated and manual welding processto support world class workmanship on all types of metals needed to support fluid delivery within the semiconductor market. The welded assemblies are usedin both wet and dry processes.Precision MachiningPrecision machining provides the ability to supply our customers with components used in our gas delivery systems and weldments, while also providingcustom machined solutions throughout customers’ equipment. Many of these items are used downstream of the gas system and in process criticalapplications. Our precision machined products can be used in both wet and dry applications.5  HistoryWe were originally incorporated as Celerity, Inc. (“Celerity”) in 1999. Our business of designing and manufacturing critical systems for semiconductorcapital equipment manufacturers operated as a stand-alone business until 2009 when Celerity sold the business to a private equity fund. Francisco Partnersacquired the business in December 2011 and formed Ichor Holdings, Ltd., an exempt company incorporated in the Cayman Islands, in March 2012 to serve asthe parent company as part of a restructuring to accommodate the expansion of our business in Singapore and Malaysia. In April 2012, we acquired SemiScenic UK Limited to provide refurbishment services for legacy tools. In April 2016, we purchased Ajax for $17.6 million to add chemical deliverysubsystem capabilities with existing customers. We completed the initial public offering of our ordinary shares in December 2016. In July 2017 we acquiredCal‑Weld, Inc. (“Cal‑Weld”) for $56.9 million to add to our gas delivery subsystem and weldment capabilities. In December 2017 we acquired TalonInnovations Corporation (“Talon”) for $137.0 million to add to our gas delivery subsystem, precision machining, and component manufacturing capabilities.We intend to continue to evaluate opportunistic acquisitions to supplement our organic growth.Customers, Sales and MarketingWe market and sell our products directly to equipment OEMs in the semiconductor equipment market. We are dependent upon a small number of customers,as the semiconductor equipment manufacturer market is highly concentrated with four companies accounting for over 80% of all process tool revenues. For2017, our two largest customers were Lam Research and Applied Materials, which accounted for 53% and 40% of sales, respectively. We do not have long-term contracts that require customers to place orders with us in fixed or minimum volumes, and we generally operate on a purchase order basis withcustomers.Our sales and marketing efforts focus on fostering close business relationships with our customers. As a result, we locate many of our account managers nearthe customer they support. Our sales process involves close collaboration between our account managers and engineering and operations teams. Accountmanagers and engineers work together with customers and in many cases provide on-site support, including attending customers’ internal meetings related toproduction and engineering design. Each customer project is supported by our account managers and customer support team, who ensure we are aligned withall of the customer’s quality, cost and delivery expectations.Operations, Manufacturing and Supply Chain ManagementWe have developed a highly flexible manufacturing model with cost-effective locations situated nearby the manufacturing facilities of our largest customers.We have facilities in the United States, Singapore, Malaysia, and the United Kingdom.OperationsOur product cycle engagements begin by working closely with our customers to outline the solution specifications before design and prototyping evenbegin. Our design and manufacturing process is highly flexible, enabling our customers to make alterations to their final requirements throughout the design,engineering and manufacturing process. This flexibility results in significantly decreased order-to-delivery cycle times for our customers. For instance, it cantake as little as 20 to 30 days for us to manufacture a gas delivery system with fully evaluated performance metrics after receiving an order.ManufacturingWe are ISO 9001 qualified at each of our manufacturing locations, and our manufactured subsystems and modules adhere to strict design tolerances andspecifications. We operate Class 100 and Class 10,000 clean room facilities for customer-specified testing, assembly and integration of high-purity gas andchemical delivery systems at our locations in Singapore; Tualatin, Oregon; and Austin, Texas. We operate a facility in Malaysia; Tualatin, Oregon; andFremont, California for weldments and related components used in our gas delivery subsystems and a facility in Union City, California for criticalcomponents used in our chemical delivery subsystems. We operate a facility in Sauk Rapids, Minnesota for precision machining of components for sale toour customers and internal use. Our facilities are located in close proximity to our largest customers to allow us to collaborate with them on a regular basisand to enable us to deliver our products on a just-in-time basis, regardless of order size or the degree of changes in the applicable configuration orspecifications.6  We qualify and test key components that are integrated into our subsystems, and test our fluid delivery subsystems during the design process and again priorto shipping. Our quality management system allows us to access real-time corrective action reports, non-conformance reports, customer complaints andcontrolled documentation. In addition, our senior management conducts quarterly reviews of our quality control system to evaluate effectiveness. Ourcustomers also complete quarterly surveys which allow us to measure satisfaction.Supply Chain ManagementWe use a wide range of components and materials in the production of our gas and chemical delivery systems, including filters, mass flow controllers,regulators, pressure transducers and valves. We obtain components and materials from a large number or sources, including single source and sole sourcesuppliers. We use consignment material and just-in-time stocking programs to better manage our component inventories and better respond to changingcustomer requirements. These approaches enable us to significantly reduce our inventory levels and maintain flexibility in responding to changes in productdemand.In addition, a key part of our strategy is to identify multiple suppliers with a strong global reach that are located within close proximity to our manufacturinglocations.Technology Development and EngineeringWe have a long history of engineering innovation and development. Over time, we have transitioned from being simply an integration engineering andcomponents company into a gas and chemical delivery subsystem leader with complete system engineering and integration expertise. Our industry continuesto experience rapid technological change, requiring us to continuously invest in technology and product development and to regularly introduce newproducts and features that meet our customers’ evolving requirements.We have built a team of gas delivery experts, many of whom have previously worked for certain of our customers. As of December 29, 2017, our engineeringteam consisted of approximately 65 engineers and designers with mechanical, electrical, chemical, systems and software expertise. Our engineers are closelyconnected with our customers and typically work at our customers’ sites and operate as an extension of our customers’ design team. We engineer within ourcustomers’ processes, design vaults, drawing standards and part numbering systems. These development efforts are designed to meet specific customerrequirements in the areas of subsystem design, materials, component selection and functionality. The majority of our sales are generated from projects duringwhich our engineers cooperated with our customer early in the design cycle. Through this early collaborative process, we become an integral part of ourcustomers’ design and development processes, and we are able to quickly anticipate and respond to our customers’ changing requirements.Our engineering team also works directly with our suppliers to help them identify new component technologies and make necessary changes in, andenhancements to, the components that we integrate into our products. Our analytical and testing capabilities enable us to evaluate multiple suppliercomponent technologies and provide customers with a wide range of appropriate component and design choices for their gas and chemical delivery systemsand other critical subsystems. Our analytical and testing capabilities also help us anticipate technological changes and the requirements in componentfeatures for next-generation gas delivery systems and other critical subsystems.CompetitionThe markets for our products are very competitive. When we compete for new business, we face competition from other suppliers of gas or chemical deliverysubsystems, as well as the internal manufacturing groups of OEMs. While many OEMs have outsourced the design and manufacture of their gas and chemicaldelivery systems, we would face additional competition if in the future these OEMs elected to develop these systems internally.The gas delivery subsystem market is highly concentrated and we face competition primarily from Ultra Clean Technology, with limited competition fromregional or specialized suppliers. The chemical delivery subsystem industry is fragmented and we face competition from numerous suppliers. In addition, themarket for tool refurbishment is fragmented and we compete with many regional competitors. The primary competitive factors we emphasize include: •early engagement with customers; •size and experience of engineering staff;7  •design-to-delivery cycle times; •flexible manufacturing capabilities; and •customer relationships.We expect our competitors to continue to improve the performance of their current products and to introduce new products or new technologies that couldadversely affect sales of our current and future products. In addition, the limited number of potential customers in our industry further intensifies competition.We anticipate that increased competitive pressures will cause intensified price-based competition and we may have to reduce the prices of our products. Inaddition, we expect to face new competitors as we enter new markets.Intellectual PropertyOur success depends, in part, upon our ability to maintain and protect our technology and products and to conduct our business without infringing theproprietary rights of others. We continue to invest in securing intellectual property protection for our technology and products and protect our technologyby, among other things, filing patent applications. We also rely on a combination of trade secrets and confidentiality provisions, and to a much lesser extent,copyrights and trademarks, to protect our proprietary rights. We have historically focused our patent protection efforts in the United States. As ofDecember 29, 2017, we held 33 patents, 16 of which were U.S. patents. While we consider our patents to be valuable assets, we do not believe the success ofour business or our overall operations are dependent upon any single patent or group of related patents. In addition, we do not believe that the loss orexpiration of any single patent or group of related patents would materially affect our business.Intellectual property that we develop on behalf of our customers is generally owned exclusively by those customers. In addition, we have agreed toindemnify certain of our customers against claims of infringement of the intellectual property rights of others with respect to our products. Historically, wehave not paid any claims under these indemnification obligations, and we do not have any pending indemnification claims against us.Employees and Labor RelationsAs of December 29, 2017, we had approximately 1,420 full‑time employees, 320 contract or temporary workers , and 20 part‑time employees, which allowflexibility as business conditions and geographic demand change. Of our total employees, approximately 65 are engineers, 60 are engaged in sales andmarketing, 1,530 are engaged in manufacturing, and 100 perform executive and administrative functions. None of our employees are unionized, but invarious countries, local law requires our participation in works councils. We have not experienced any material work stoppages at any of our facilities. Weconsider our relationship with our employees to be good.Environmental, Health, and Safety RegulationsOur operations and facilities are subject to federal, state and local regulatory requirements and foreign laws and regulations, relating to environmental, wastemanagement and health and safety matters, including those relating to the release, use, storage, treatment, transportation, discharge, disposal and remediationof contaminants, hazardous substances and wastes, as well as practices and procedures applicable to the construction and operation of our facilities. Webelieve that our business is operated in substantial compliance with applicable regulations. However, in the future we could incur substantial costs, includingcleanup costs, fines or civil or criminal sanctions, or third-party property damage or personal injury claims, in the event of violations or liabilities under theselaws and regulations, or non-compliance with the environmental permits required at our facilities. Potentially significant expenditures could be required inorder to comply with environmental laws that may be adopted or imposed in the future. We are not aware of any threatened or pending environmentalinvestigations, lawsuits or claims involving us, our operations or our current or former facilities.Available InformationOur internet address is www.ichorsystems.com. We make a variety of information available, free of charge, at our Investor Relations website,ir.ichorsystems.com. This information includes our Annual Reports on Form 10‑K, our Quarterly Reports on Form 10‑Q, our Current Reports on Form 8‑K,and any amendments to those reports as soon as reasonably practicable after we electronically file those reports with or furnish them to the Securities andExchange Commission (“SEC”), as well as our Code of Business Ethics and Conduct and other governance documents.8  The public may read and copy materials filed by us with the Securities and Exchange Commission, or the SEC, at the SEC’s Public Reference Room at100 F Street, NE Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at1‑800‑SEC‑0330. The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that filedocuments electronically with the SEC at www.sec.gov.The contents of these websites, or the information connected to those websites, are not incorporated into this report. References to websites in this report areprovided as a convenience and do not constitute, and should not be viewed as, incorporation by reference of the information contained on, or availablethrough, the website.ITEM 1A. RISK FACTORSThere are many factors that affect our business and the results of operations, some of which are beyond our control. The following is a description of someimportant factors that may cause the actual results of operations in future periods to differ materially from those currently expected or desired.Risks Related to Our BusinessOur business depends significantly on expenditures by manufacturers in the semiconductor capital equipment industry, which, in turn, is dependentupon the semiconductor device industry. When that industry experiences cyclical downturns, demand for our products and services is likely to decrease,which would likely result in decreased sales. We may also be forced to reduce our prices during cyclical downturns without being able to proportionallyreduce costs.Our business, financial condition and results of operations depend significantly on expenditures by manufacturers in the semiconductor capital equipmentindustry. In turn, the semiconductor capital equipment industry depends upon the current and anticipated market demand for semiconductor devices. Thesemiconductor device industry is subject to cyclical and volatile fluctuations in supply and demand and in the past has periodically experienced significantdownturns, which often occur in connection with declines in general economic conditions, and which have resulted in significant volatility in thesemiconductor capital equipment industry. The semiconductor device industry has also experienced recurring periods of over-supply of products that havehad a severe negative effect on the demand for capital equipment used to manufacture such products. We have experienced, and anticipate that we willcontinue to experience, significant fluctuations in customer orders for our products and services as a result of such fluctuations and cycles. Any downturns inthe semiconductor device industry could have a material adverse effect on our business, financial condition and results of operations.In addition, we must be able to appropriately align our cost structure with prevailing market conditions, effectively manage our supply chain and motivateand retain employees, particularly during periods of decreasing demand for our products. We may be forced to reduce our prices during periods of decreasingdemand. While we operate under a low fixed cost model, we may not be able to proportionally reduce all of our costs if we are required to reduce our prices. Ifwe are not able to timely and appropriately adapt to the changes in our business environment, our business, financial condition and results of operations willbe materially adversely affected. The cyclical and volatile nature of the semiconductor device industry and the absence of long-term fixed or minimumvolume contracts make any effort to project a material reduction in future sales volume difficult.We rely on a very small number of OEM customers for a significant portion of our sales. Any adverse change in our relationships with these customerscould materially adversely affect our business, financial condition and results of operations.The semiconductor capital equipment industry is highly concentrated and has experienced significant consolidation in recent years. As a result, a relativelysmall number of OEM customers have historically accounted for a significant portion of our sales, and we expect this trend to continue for the foreseeablefuture. For 2017, our top two customers accounted for approximately 53% and 40%, respectively, of sales, and we expect that our sales will continue to beconcentrated among a very small number of customers. We do not have any long-term contracts that require customers to place orders with us in fixed orminimum volumes. Accordingly, the success of our business depends on the success of our customers and those customers and other OEMs continuing tooutsource the manufacturing of critical subsystems and process solutions to us. Because of the small number of OEMs in the markets we serve, a number ofwhich are already our customers, it would be difficult to replace lost sales resulting from the loss of, or the reduction, cancellation or delay in purchase ordersby, any one of these customers, whether due to a reduction in the amount of outsourcing they do, their giving orders to our competitors, their acquisition byan OEM who is not a customer or with whom we do less business, or otherwise. We have in the past lost business from customers for a number of thesereasons. If we are unable to replace sales from customers who reduce the volume of products and services they purchase from us or terminate their relationshipwith us entirely, such events could have a material adverse impact on our business, financial condition and results of operations.9  Additionally, if one or more of the largest OEMs were to decide to single- or sole-source all or a significant portion of manufacturing and assembly work to asingle equipment manufacturer, such a development would heighten the risks discussed above.Our customers exert a significant amount of negotiating leverage over us, which may require us to accept lower prices and gross margins or increasedliability risk in order to retain or expand our market share with them.By virtue of our largest customers’ size and the significant portion of our sales that is derived from them, as well as the competitive landscape, our customersare able to exert significant influence and pricing pressure in the negotiation of our commercial arrangements and the conduct of our business with them. Ourcustomers often require reduced prices or other pricing, quality or delivery commitments as a condition to their purchasing from us in any given period orincreasing their purchase volume, which can, among other things, result in reduced gross margins in order to maintain or expand our market share. Ourcustomers’ negotiating leverage also can result in customer arrangements that may contain significant liability risk to us. For example, some of our customersrequire that we provide them indemnification against certain liabilities in our arrangements with them, including claims of losses by their customers causedby our products. Any increase in our customers’ negotiating leverage may expose us to increased liability risk in our arrangements with them, which, ifrealized, may have a material adverse effect on our business, financial condition and results of operations. In addition, new products often carry lower grossmargins than existing products for several quarters following their introduction. If we are unable to retain and expand our business with our customers onfavorable terms, or if we are unable to achieve gross margins on new products that are similar to or more favorable than the gross margins we have historicallyachieved, our business, financial condition and results of operations may be materially adversely affected.The industries in which we participate are highly competitive and rapidly evolving, and if we are unable to compete effectively, our business, financialcondition and results of operations could be materially adversely affected.We face intense competition from other suppliers of gas or chemical delivery subsystems, as well as the internal manufacturing groups of OEMs. Increasedcompetition has in the past resulted, and could in the future result, in price reductions, reduced gross margins or loss of market share, any of which wouldmaterially adversely affect our business, financial condition and results of operations. We are subject to significant pricing pressure as we attempt to maintainand increase market share with our existing customers. Our competitors may offer reduced prices or introduce new products or services for the marketscurrently served by our products and services. These products may have better performance, lower prices and achieve broader market acceptance than ourproducts. OEMs also typically own the design rights to their products. Further, if our competitors obtain proprietary rights to these designs such that we areunable to obtain the designs necessary to manufacture products for our OEM customers, our business, financial condition and results of operations could bematerially adversely affected.Certain of our competitors may have or may develop greater financial, technical, manufacturing and marketing resources than we do. As a result, they may beable to respond more quickly to new or emerging technologies and changes in customer requirements, devote greater resources to the development,promotion, sale and support of their products and services, and reduce prices to increase market share. In addition to organic growth by our competitors, theremay be merger and acquisition activity among our competitors and potential competitors that may provide our competitors and potential competitors with anadvantage over us by enabling them to expand their product offerings and service capabilities to meet a broader range of customer needs. The introduction ofnew technologies and new market entrants may also increase competitive pressures.10  We are exposed to risks associated with weakness in the global economy and geopolitical instability.Our business is dependent upon manufacturers of semiconductor capital equipment, whose businesses in turn ultimately depend largely on consumerspending on semiconductor devices. Continuing uncertainty regarding the global economy continues to pose challenges to our business. Economicuncertainty and related factors, including current unemployment levels, uncertainty in European debt markets, geopolitical instability in various parts of theworld, fiscal uncertainty in the U.S. economy, market volatility and the slow rate of recovery of many countries from recent recessions, exacerbate negativetrends in business and consumer spending and may cause certain of our customers to push out, cancel or refrain from placing orders for products or services,which may reduce sales and materially adversely affect our business, financial condition and results of operations. Difficulties in obtaining capital, uncertainmarket conditions or reduced profitability may also cause some customers to scale back operations, exit businesses, merge with other manufacturers, or filefor bankruptcy protection and potentially cease operations, leading to customers’ reduced research and development funding and/or capital expendituresand, in turn, lower orders from our customers and/or additional slow moving or obsolete inventory or bad debt expense for us. These conditions may alsosimilarly affect our key suppliers, which could impair their ability to deliver parts and result in delays for our products or require us to either procure productsfrom higher-cost suppliers, or if no additional suppliers exist, to reconfigure the design and manufacture of our products, and we may be unable to fulfill somecustomer orders. Any of these conditions or events could have a material adverse effect on our business, financial condition and results of operations.If we do not keep pace with developments in the industries we serve and with technological innovation generally, our products and services may not becompetitive.Rapid technological innovation in the markets we serve requires us to anticipate and respond quickly to evolving customer requirements and could renderour current product offerings, services and technologies obsolete. In particular, the design and manufacturing of semiconductors is constantly evolving andbecoming more complex in order to achieve greater power, performance and efficiency with smaller devices. Capital equipment manufacturers need to keeppace with these changes by refining their existing products and developing new products.We believe that our future success will depend upon our ability to design, engineer and manufacture products that meet the changing needs of our customers.This requires that we successfully anticipate and respond to technological changes in design, engineering and manufacturing processes in a cost-effectiveand timely manner. If we are unable to integrate new technical specifications into competitive product designs, develop the technical capabilities necessaryto manufacture new products or make necessary modifications or enhancements to existing products, our business, financial condition and results ofoperations could be materially adversely affected.The timely development of new or enhanced products is a complex and uncertain process which requires that we: •design innovative and performance-enhancing features that differentiate our products from those of our competitors; •identify emerging technological trends in the industries we serve, including new standards for our products; •accurately identify and design new products to meet market needs; •collaborate with OEMs to design and develop products on a timely and cost-effective basis; •ramp-up production of new products, especially new subsystems, in a timely manner and with acceptable yields; •manage our costs of product development and the costs of producing the products that we sell; •successfully manage development production cycles; and •respond quickly and effectively to technological changes or product announcements by others.If we are unsuccessful in keeping pace with technological developments for the reasons above or other reasons, our business, financial condition and resultsof operations could be materially adversely affected.11  We must design, develop and introduce new products that are accepted by OEMs in order to retain our existing customers and obtain new customers.The introduction of new products is inherently risky because it is difficult to foresee the adoption of new standards, coordinate our technical personnel andstrategic relationships and win acceptance of new products by OEMs. We attempt to mitigate this risk by collaborating with our customers during theirdesign and development processes. We cannot, however, assure you that we will be able to successfully introduce, market and cost-effectively manufacturenew products, or that we will be able to develop new or enhanced products and processes that satisfy customer needs. In addition, new capital equipmenttypically has a lifespan of five to ten years, and OEMs frequently specify which systems, subsystems, components and instruments are to be used in theirequipment. Once a specific system, subsystem, component or instrument is incorporated into a piece of capital equipment, it will often continue to bepurchased for that piece of equipment on an exclusive basis for 18 to 24 months before the OEM generates enough sales volume to consider addingalternative suppliers. Accordingly, it is important that our products are designed into the new systems introduced by the OEMs. If any of the new products wedevelop are not launched or successful in the market, our business, financial condition and results of operations could be materially adversely affected.The manufacturing of our products is highly complex, and if we are not able to manage our manufacturing and procurement process effectively, ourbusiness, financial condition and results of operations may be materially adversely affected.The manufacturing of our products is a highly complex process that involves the integration of multiple components and requires effective management ofour supply chain while meeting our customers’ design-to-delivery cycle time requirements. Through the course of the manufacturing process, our customersmay modify design and system configurations in response to changes in their own customers’ requirements. In order to rapidly respond to these modificationsand deliver our products to our customers in a timely manner, we must effectively manage our manufacturing and procurement process. If we fail to managethis process effectively, we risk losing customers and damaging our reputation. We may also be subject to liability under our agreements with our customersif we or our suppliers fail to re- configure manufacturing processes or components in response to these modifications. In addition, if we acquire inventory inexcess of demand or that does not meet customer specifications, we could incur excess or obsolete inventory charges. We have from time to time experiencedbottlenecks and production difficulties that have caused delivery delays and quality control problems. These risks are even greater as we seek to expand ourbusiness into new subsystems. In addition, certain of our suppliers have been, and may in the future be, forced out of business as a result of the economicenvironment. In such cases, we may be required to procure products from higher-cost suppliers or, if no additional suppliers exist, reconfigure the design andmanufacture of our products. This could materially limit our growth, adversely impact our ability to win future business and have a material adverse effect onour business, financial condition and results of operations.Defects in our products could damage our reputation, decrease market acceptance of our products and result in potentially costly litigation.A number of factors, including design flaws, material and component failures, contamination in the manufacturing environment, impurities in the materialsused and unknown sensitivities to process conditions, such as temperature and humidity, as well as equipment failures, may cause our products to containundetected errors or defects. Errors, defects or other problems with our products may: •cause delays in product introductions and shipments; •result in increased costs and diversion of development resources; •cause us to incur increased charges due to unusable inventory; •require design modifications; •result in liability for the unintended release of hazardous materials; •create claims for rework, replacement and/or damages under our contracts with customers, as well as indemnification claims from customers; •decrease market acceptance of, or customer satisfaction with, our products, which could result in decreased sales and increased product returns;or •result in lower yields for semiconductor manufacturers.12  If any of our products contain defects or have reliability, quality or compatibility problems, our reputation may be damaged and customers may be reluctantto buy our products. We may also face a higher rate of product defects as we increase our production levels in periods of significant growth. Product defectscould result in warranty and indemnification liability or the loss of existing customers or impair our ability to attract new customers. In addition, we may notfind defects or failures in our products until after they are installed in a manufacturer’s fabrication facility. We may have to invest significant capital andother resources to correct these problems. Our current or potential customers also might seek to recover from us any losses resulting from defects or failures inour products. In addition, hazardous materials flow through and are controlled by certain of our products and an unintended release of these materials couldresult in serious injury or death. Liability claims could require us to spend significant time and money in litigation or pay significant damages.We may incur unexpected warranty and performance guarantee claims that could materially adversely affect our business, financial condition andresults of operations.In connection with our products and services, we provide various product warranties, performance guarantees and indemnification rights. Warranty or otherperformance guarantee or indemnification claims against us could cause us to incur significant expense to repair or replace defective products or indemnifythe affected customer for losses. In addition, quality issues can have various other ramifications, including delays in the recognition of sales, loss of sales, lossof future sales opportunities, increased costs associated with repairing or replacing products, and a negative impact on our reputation, all of which couldmaterially adversely affect our business, financial condition and results of operations.Our dependence on a limited number of suppliers may harm our production output and increase our costs, and may prevent us from deliveringacceptable products on a timely basis.Our ability to meet our customers’ demand for our products depends upon obtaining adequate supplies of quality components and other raw materials on atimely basis. In addition, our customers often specify components from particular suppliers that we must incorporate into our products. We also useconsignment and just-in-time stocking programs, which means we carry very little inventory of components or other raw materials, and we rely on oursuppliers to deliver necessary components and raw materials in a timely manner. However, our suppliers are under no obligation to provide us withcomponents or other raw materials. As a result, the loss of or failure to perform by any of our key suppliers could materially adversely affect our ability todeliver products on a timely basis. In addition, if a supplier was unable to provide the volume of components we require on a timely basis and at acceptableprices and quality, we would have to identify and qualify replacements from alternative sources of supply. However, the process of qualifying new suppliersfor complex components is also lengthy and could delay our production. We may also experience difficulty in obtaining sufficient supplies of componentsand raw materials in times of significant growth in our business. If we are unable to procure sufficient quantities of components or raw materials fromsuppliers, our customers may elect to delay or cancel existing orders or not place future orders, which could have a material adverse effect on our business,financial condition and results of operations.We are subject to order and shipment uncertainties, and any significant reductions, cancellations or delays in customer orders could have a materialadverse effect on our business, financial condition and results of operations.Our sales are difficult to forecast because we generally do not have a material backlog of unfilled orders and because of the short time frame within which weare often required to manufacture and deliver products to our customers. Most of our sales for a particular quarter depend on customer orders placed duringthat quarter or shortly before it commences. Our contracts generally do not require our customers to commit to minimum purchase volumes. While most of ourcustomers provide periodic rolling forecasts for product orders, those forecasts do not become binding until a formal purchase order is submitted, whichgenerally occurs only a short time prior to shipment. As a result of the foregoing and the cyclicality and volatility of the industries we serve, it is difficult topredict future orders with precision. Occasionally, we order component inventory and build products in advance of the receipt of actual customer orders.Customers may cancel order forecasts, change production quantities from forecasted volumes or delay production for reasons beyond our control.Furthermore, reductions, cancellations or delays in customer order forecasts usually occur without penalty to, or compensation from, the customer.Reductions, cancellations or delays in forecasted orders could cause us to hold inventory longer than anticipated, which could reduce our gross profit, restrictour ability to fund our operations and result in unanticipated reductions or delays in sales. If we do not obtain orders as we anticipate, we could have excesscomponents for a specific product and/or finished goods inventory that we would not be able to sell to another customer, likely resulting in inventory write-offs, which could have a material adverse effect on our business, financial condition and results of operations.13  Because our customers generally require that they qualify our engineering, documentation, manufacturing and quality control procedures, our abilityto add new customers quickly is limited.We are generally required to qualify and maintain our status as a supplier for each of our customers. This is a time-consuming process that involves theinspection and approval by a customer of our engineering, documentation, manufacturing and quality control procedures before that customer will placeorders with us. Our ability to lessen the adverse effect of any loss of, or reduction in sales to, an existing customer through the rapid addition of one or morenew customers is limited in part because of these qualification requirements. Consequently, the risk that our business, financial condition and results ofoperations would be materially adversely affected by the loss of, or any reduction in orders by, any of our significant customers is increased. Moreover, if welost our existing status as a qualified supplier to any of our customers, such customer could cancel its orders from us or otherwise terminate its relationshipwith us, which could have a material adverse effect on our business, financial condition and results of operations.We may be subject to interruptions or failures in our information technology systems.We rely on our information technology systems to process transactions, summarize our operating results and manage our business. Our informationtechnology systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, cyber-attack orother security breaches, catastrophic events, such as fires, floods, earthquakes, tornadoes, hurricanes, acts of war or terrorism, and usage errors by ouremployees. If our information technology systems are damaged or cease to function properly, we may have to make a significant investment to fix or replacethem, and we may suffer loss of critical data and interruptions or delays in our operations.We may be the target of attempted cyber attacks, computer viruses, malicious code, phishing attacks, denial of service attacks and other information securitythreats. To date, cyber attacks have not had a material impact on our financial condition, results or business; however, we could suffer material financial orother losses in the future and we are not able to predict the severity of these attacks. Our risk and exposure to these matters remains heightened because of,among other things, the evolving nature of these threats, the current global economic and political environment, our prominent size and scale and our role inthe financial services industry, the outsourcing of some of our business operations, the ongoing shortage of qualified cyber security professionals, and theinterconnectivity and interdependence of third parties to our systems. The occurrence of a cyber attack, breach, unauthorized access, misuse, computer virusor other malicious code or other cyber security event could jeopardize or result in the unauthorized disclosure, gathering, monitoring, misuse, corruption, lossor destruction of confidential and other information that belongs to us, our customers, our counterparties, third-party service providers or borrowers that isprocessed and stored in, and transmitted through, our computer systems and networks. The occurrence of such an event could also result in damage to oursoftware, computers or systems, or otherwise cause interruptions or malfunctions in our, our customers’, our counterparties’ or third parties’ operations. Thiscould result in significant losses, loss of customers and business opportunities, reputational damage, litigation, regulatory fines, penalties or intervention,reimbursement or other compensatory costs, or otherwise adversely affect our business, financial condition or results of operations.The reliability and capacity of our information technology systems is critical to our operations and the implementation of our growth initiatives. Anymaterial disruption in our information technology systems, or delays or difficulties in implementing or integrating new systems or enhancing current systems,could have an adverse effect on our business, and results of operations.Restrictive covenants under our Credit Facilities may limit our current and future operations. If we fail to comply with those covenants, the lenderscould cause outstanding amounts, which are currently substantial, to become immediately due and payable, and we might not have sufficient funds andassets to pay such loans.As of December 29, 2017, we had $179.5 million of indebtedness outstanding under our term loan facility, or our Term Loan Facility, and $10.0 million ofindebtedness outstanding under our revolving credit facility, or our Revolving Credit Facility, and together with our Term Loan Facility, our CreditFacilities. The outstanding amount of our Credit Facilities reflected in our consolidated financial statements included elsewhere in this report on Form 10-Kis net of $2.8 million of debt issuance costs. On February 14, 2018, we amended and restated the credit agreement governing our Credit Facilities resulting ina $175.0 million Term Loan Facility and a Revolving Credit Facility enabling borrowing up to $125.0 million. We may incur additional indebtedness in thefuture. Our Credit Facilities contain certain restrictive covenants and conditions, including limitations on our ability to, among other things: •incur additional indebtedness or contingent obligations; •create or incur liens, negative pledges or guarantees; •make investments; •make loans;14  •sell or otherwise dispose of assets; •merge, consolidate or sell substantially all of our assets; •make certain payments on indebtedness; •pay dividends on or make distributions in respect of capital stock or make certain other restricted payments or investments; •enter into certain agreements that restrict distributions from restricted subsidiaries; •enter into transactions with affiliates; •change the nature of our business; and •amend the terms of our organizational documents.As a result of these covenants, we may be restricted in our ability to pursue new business opportunities or strategies or to respond quickly to changes in theindustries that we serve. A violation of any of these covenants would be deemed an event of default under our Credit Facilities. In such event, upon theelection of the lenders, the loan commitments under our Credit Facilities would terminate and the principal amount of the loans and accrued interest thenoutstanding would be due and payable immediately. A default may also result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In the event our lenders accelerate the repayment of our borrowings, we cannot assure you that we and our subsidiaries would havesufficient funds to repay such indebtedness or be able to obtain replacement financing on a timely basis or at all. These events could force us into bankruptcyor liquidation, which could have a material adverse effect on our business, financial condition and results of operations.We also may need to negotiate changes to the covenants in the agreements governing our Credit Facilities in the future if there are material changes in ourbusiness, financial condition or results of operations, but we cannot assure you that we will be able to do so on terms favorable to us or at all.Certain of our customers require that we consult with them in connection with specified fundamental changes in our business, and address any concernsor requests such customer may have in connection with a fundamental change. While those customers do not have contractual approval or veto rightswith respect to fundamental changes, our failure to consult with such customers or to satisfactorily respond to their requests in connection with any suchfundamental change could constitute a breach of contract or otherwise be detrimental to our relationships with such customers.Certain of our key customers require that we consult with them in connection with specified fundamental changes in our business, including, among otherthings: •entering into any new line of business; •amending or modifying our organizational documents; •selling all or substantially all of our assets, or merging or amalgamating with a third party; •incur borrowings in excess of a specific amount; •making senior management changes; •entering into any joint venture arrangement; and •effecting an initial public offering.These customers do not have contractual approval or veto rights with respect to any fundamental changes in our business. However, our failure to consultwith such customers or to satisfactorily respond to their requests in connection with any such fundamental change could constitute a breach of contract orotherwise be detrimental to our relationships with such customers, which could have a material adverse effect on our business, financial condition and resultsof operations.15  We may not be able to generate sufficient cash to service all of our indebtedness, including under our Credit Facilities, and may be forced to take otheractions to satisfy our obligations under our indebtedness, which may not be successful.Our ability to make scheduled payments on or to refinance our indebtedness, including under our Credit Facilities, depends on our financial condition andresults of operations, which are subject to prevailing economic and competitive conditions and other factors beyond our control. We may be unable tomaintain a level of cash flows from operating activities sufficient to permit us to fund our day-to-day operations or to pay the principal, premium, if any, andinterest on our indebtedness. If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidityproblems and could be forced to reduce or delay investments and capital expenditures or to sell assets or operations, seek additional capital or restructure orrefinance our indebtedness. If we cannot make scheduled payments on our debt, we will be in default and, as a result, the lenders under our Credit Facilitiescould terminate their commitments to loan money, or foreclose against the assets securing such borrowings, and we could be forced into bankruptcy orliquidation, in each case, which would have a material adverse effect on our business, financial condition and results of operations.Our business is largely dependent on the know-how of our employees, and we generally do not have an intellectual property position that is protected bypatents.We believe that the success of our business depends in part on our proprietary technology, information, processes and know-how and on our ability tooperate without infringing on the proprietary rights of third parties. We rely on a combination of trade secrets and contractual confidentiality provisions and,to a much lesser extent, patents, copyrights and trademarks to protect our proprietary rights. Accordingly, our intellectual property position is morevulnerable than it would be if it were protected primarily by patents. We cannot assure you that we have adequately protected or will be able to adequatelyprotect our technology, that our competitors will not be able to utilize our existing technology or develop similar technology independently, that the claimsallowed with respect to any patents held by us will be broad enough to protect our technology or that foreign intellectual property laws will adequatelyprotect our intellectual property rights. If we fail to protect our proprietary rights successfully, our competitive position could suffer. Any future litigation toenforce patents issued to us, to protect trade secrets or know-how possessed by us or to defend ourselves or to indemnify others against claimed infringementof the rights of others could have a material adverse effect on our business, financial condition and results of operations.Third parties have claimed and may in the future claim we are infringing their intellectual property, which could subject us to litigation or licensingexpenses, and we may be prevented from selling our products if any such claims prove successful.We may in the future receive claims that our products, processes or technologies infringe the patents or other proprietary rights of third parties. In addition,we may be unaware of intellectual property rights of others that may be applicable to our products. Any litigation regarding our patents or other intellectualproperty could be costly and time-consuming and divert our management and key personnel from our business operations, any of which could have amaterial adverse effect on our business, financial condition and results of operations. The complexity of the technology involved in our products and theuncertainty of intellectual property litigation increase these risks. Claims of intellectual property infringement may also require us to enter into costly licenseagreements. However, we may not be able to obtain licenses on terms acceptable to us, or at all. We also may be subject to significant damages or injunctionsagainst the development, manufacture and sale of certain of our products if any such claims prove successful. We also rely on design specifications and otherintellectual property of our customers in the manufacture of products for such customers. While our customer agreements generally provide forindemnification of us by a customer if we are subjected to litigation for third-party claims of infringement of such customer’s intellectual property, suchindemnification provisions may not be sufficient to fully protect us from such claims, or our customers may breach such indemnification obligations to us,which could result in costly litigation to defend against such claims or enforce our contractual rights to such indemnification.From time to time, we may become involved in other litigation and regulatory proceedings, which could require significant attention from ourmanagement and result in significant expense to us and disruptions in our business.In addition to any litigation related to our intellectual property rights, we may in the future be named as a defendant from time to time in other lawsuits andregulatory actions relating to our business, such as commercial contract claims, employment claims and tax examinations, some of which may claimsignificant damages or cause us reputational harm. Due to the inherent uncertainties of litigation and regulatory proceedings, we cannot predict the ultimateoutcome of any such proceeding. An unfavorable outcome could have a material adverse effect on our business, financial condition and results of operationsor limit our ability to engage in certain of our business activities. In addition, regardless of the outcome of any litigation or regulatory proceeding, suchproceedings are often expensive, time-consuming and disruptive to normal business operations and require significant attention from our management. As aresult, any such lawsuits or proceedings could materially adversely affect our business, financial condition and results of operations.16  The technology labor market is very competitive, and our business will suffer if we are unable to hire and retain key personnel.Our future success depends in part on the continued service of our key executive officers, as well as our research, engineering, sales and manufacturingpersonnel, most of whom are not subject to employment or non-competition agreements. Competition for qualified personnel in the technology industry isparticularly intense, and we operate in geographic locations in which labor markets are competitive. Our management team has significant industryexperience and deep customer relationships, and therefore would be difficult to replace. In addition, our business is dependent to a significant degree on theexpertise and relationships which only a limited number of engineers possess. Many of these engineers often work at our customers’ sites and serve as anextension of our customers’ product design teams. The loss of any of our key executive officers or key engineers and other personnel, including our engineersworking at our customers’ sites, or the failure to attract additional personnel as needed, could have a material adverse effect on our business, financialcondition and results of operations and could lead to higher labor costs, the use of less-qualified personnel and the loss of customers. In addition, if any of ourkey executive officers or other key employees were to join a competitor or form a competing company, we could lose customers, suppliers, know-how andkey personnel.We do not maintain key-man life insurance with respect to any of our employees. Our business will suffer if we are unable to attract, employ and retain highlyskilled personnel.Future acquisitions may present integration challenges, and if the goodwill, indefinite-lived intangible assets and other long-term assets recorded inconnection with such acquisitions become impaired, we would be required to record impairment charges, which may be significant.We have acquired strategic businesses in the past and if we find appropriate opportunities in the future, we may acquire businesses, products or technologiesthat we believe are strategic. The process of integrating an acquired business, product or technology may produce unforeseen operating difficulties andexpenditures, fail to result in expected synergies or other benefits and absorb significant attention of our management that would otherwise be available forthe ongoing development of our business. In addition, we may record a portion of the assets we acquire as goodwill, other indefinite-lived intangible assets orfinite-lived intangible assets. We do not amortize goodwill and indefinite-lived intangible assets, but rather review them for impairment on an annual basis orwhenever events or changes in circumstances indicate that their carrying value may not be recoverable. The recoverability of goodwill and indefinite-livedintangible assets is dependent on our ability to generate sufficient future earnings and cash flows. Changes in estimates, circumstances or conditions,resulting from both internal and external factors, could have a significant impact on our fair valuation determination, which could then have a materialadverse effect on our business, financial condition and results of operations.Our quarterly sales and operating results fluctuate significantly from period to period, and this may cause volatility in our share price.Our quarterly sales and operating results have fluctuated significantly in the past, and we expect them to continue to fluctuate in the future for a variety ofreasons, including the following: •demand for and market acceptance of our products as a result of the cyclical nature of the industries we serve or otherwise, often resulting inreduced sales during industry downturns and increased sales during periods of industry recovery or growth; •overall economic conditions; •changes in the timing and size of orders by our customers; •strategic decisions by our customers to terminate their outsourcing relationship with us or give market share to our competitors; •consolidation by our customers; •cancellations and postponements of previously placed orders; •pricing pressure from either our competitors or our customers, resulting in the reduction of our product prices or loss of market share; •disruptions or delays in the manufacturing of our products or in the supply of components or raw materials that are incorporated into or used tomanufacture our products, thereby causing us to delay the shipment of products; •decreased margins for several or more quarters following the introduction of new products, especially as we introduce new subsystems or otherproducts or services;17  •changes in design-to-delivery cycle times; •inability to reduce our costs quickly in step with reductions in our prices or in response to decreased demand for our products; •changes in our mix of products sold; •write-offs of excess or obsolete inventory; •one-time expenses or charges; and •announcements by our competitors of new products, services or technological innovations, which may, among other things, render ourproducts less competitive.As a result of the foregoing, we believe that quarter-to-quarter comparisons of our sales and results of operations may not be meaningful and that thesecomparisons may not be an accurate indicator of our future performance. Changes in the timing or terms of a small number of transactions coulddisproportionately affect our results of operations in any particular quarter. Moreover, our results of operations in one or more future quarters may fail to meetour guidance or the expectations of securities analysts or investors. If this occurs, we would expect to experience an immediate and significant decline in thetrading price of our ordinary shares.Labor disruptions could materially adversely affect our business, financial condition and results of operations.As of December 29, 2017, we had approximately 1,420 full time employees, 320 contract or temporary workers, and 20 part‑time employees worldwide. Noneof our employees are unionized, but in various countries, local law requires our participation in works councils. While we have not experienced any materialwork stoppages at any of our facilities, any stoppage or slowdown could cause material interruptions in manufacturing, and we cannot assure you thatalternate qualified capacity would be available on a timely basis, or at all. As a result, labor disruptions at any of our facilities could materially adverselyaffect our business, financial condition and results of operations.As a global company, we are subject to the risks of doing business internationally, including periodic foreign economic downturns and politicalinstability, which may adversely affect our sales and cost of doing business in those regions of the world.Foreign economic downturns have adversely affected our business and results of operations in the past and could adversely affect our business and results ofoperations in the future. In addition, other factors relating to the operation of our business outside of the United States may have a material adverse effect onour business, financial condition and results of operations in the future, including: •the imposition of governmental controls or changes in government regulations, including tax regulations; •difficulties in enforcing our intellectual property rights; •difficulties in developing relationships with local suppliers; •difficulties in attracting new international customers; •difficulties in complying with foreign and international laws and treaties; •restrictions on the export of technology; •compliance with U.S. and international laws involving international operations, including the Foreign Corrupt Practices Act, export controllaws and export license requirements; •difficulties in achieving headcount reductions due to unionized labor and works councils; •restrictions on transfers of funds and assets between jurisdictions; •geo-political instability; and •trade restrictions and changes in taxes and tariffs.18  In the future, we may seek to expand our presence in certain foreign markets or enter emerging markets. Evaluating or entering into an emerging market mayrequire considerable management time, as well as start-up expenses for market development before any significant sales and earnings are generated.Operations in new foreign markets may achieve low margins or may be unprofitable, and expansion in existing markets may be affected by local political,economic and market conditions. As we continue to operate our business globally, our success will depend, in part, on our ability to anticipate andeffectively manage these and the other risks noted above. The impact of any one or more of these factors could materially adversely affect our business,financial condition and results of operations.We are subject to fluctuations in foreign currency exchange rates which could cause operating results and reported financial results to varysignificantly from period to period.The vast majority of our sales are denominated in U.S. Dollars. Many of the costs and expenses associated with our Singapore, Malaysian and U.K. operationsare paid in Singapore Dollars, Malaysian Ringgit or British Pounds (or Euros), respectively, and we expect our exposure to these currencies to increase as weincrease our operations in those countries. As a result, our risk exposure from transactions denominated in non-U.S. currencies is primarily related to theSingapore Dollar, Malaysian Ringgit, British Pound and Euro. In addition, because the majority of our sales are denominated in the U.S. Dollar, if one ormore of our competitors sells to our customers in a different currency than the U.S. Dollar, we are subject to the risk that the competitors’ products will berelatively less expensive than our products due to exchange rate effects. We have not historically established transaction-based hedging programs. Foreigncurrency exchange risks inherent in doing business in foreign countries could have a material adverse effect on our business, financial condition and resultsof operations.We are subject to numerous environmental laws and regulations, which could require us to incur environmental liabilities, increase our manufacturingand related compliance costs or otherwise adversely affect our business.We are subject to a variety of federal, state, local and foreign laws and regulations governing the protection of the environment. These environmental lawsand regulations include those relating to the use, storage, handling, discharge, emission, disposal and reporting of toxic, volatile or otherwise hazardousmaterials used in our manufacturing processes. These materials may have been or could be released into the environment at properties currently or previouslyowned or operated by us, at other locations during the transport of materials or at properties to which we send substances for treatment or disposal. Inaddition, we may not be aware of all environmental laws or regulations that could subject us to liability in the United States or internationally. If we were toviolate or become liable under environmental laws and regulations or become non-compliant with permits required at some of our facilities, we could be heldfinancially responsible and incur substantial costs, including cleanup costs, fines and civil or criminal sanctions, third-party property damage or personalinjury claims.Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on ourbusiness and stock price.As a publicly traded company, we are required to comply with the SEC’s rules implementing Section 302 and 404 of the Sarbanes-Oxley Act, which requiremanagement to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness ofcontrols over financial reporting. Pursuant to the JOBS Act, our independent registered public accounting firm will not be required to attest to theeffectiveness of our internal control over financial reporting until the later of the year following our first annual report required to be filed with the SEC or thedate we are no longer an emerging growth company, which may be up to five full fiscal years following our initial public offering in December 2016.If we identify weaknesses in our internal control over financial reporting, are unable to comply with the requirements of Section 404 in a timely manner or toassert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion asto the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reportsand the market price of our common stock could be negatively affected, and we could become subject to investigations by NASDAQ, the SEC or otherregulatory authorities, which could require additional financial and management resources.19  In the second quarter of 2017, we identified material weaknesses in our internal control over financial reporting and may identify additional materialweaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our financial statements. Ifour internal control over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report ourfinancial results, prevent fraud or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financialinformation and may lead to a decline in our share price.During the second quarter of 2017, we identified a material weakness in our internal control over financial reporting related to ineffective periodic riskassessment over control activities that ensure the ending inventory balances of our Malaysia and Singapore subsidiaries were recorded at the appropriate U.S.Dollar functional currency rate. During our previous consolidation process, we had a manual process that translated these inventory balances into the U.S.Dollar functional currency at incorrect rates for these subsidiaries due to system limitations, and we did not implement a control to reconcile the endinginventory balance at our Malaysia and Singapore subsidiaries to the final inventory balance reported in our consolidated financial statements. This materialweakness resulted in an accumulated overstatement of inventory as of March 31, 2017 of approximately $1.75 million. We corrected this overstatement inthe second quarter of 2017 with a charge to cost of sales of $1.75 million. Additionally, we re‑implemented our Oracle system, which allows for asystems‑based calculation of inventory purchases and ending inventory at the proper U.S. Dollar functional currency rates, and implemented a control toreconcile the final Malaysia and Singapore inventory sub‑ledger balances to the final balances recorded in consolidation. These improvements to ourinternal controls, implemented during 2017, were in place and demonstrated a sustained period of effective operation during 2017 to enable management ofthe Company to conclude the material weakness has been remediated as of December 29, 2017.If our internal control over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report ourfinancial results, prevent fraud or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financialinformation and may lead to a decline in our stock price.There are limitations on the effectiveness of controls, and the failure of our control systems may materially and adversely impact us.We do not expect that disclosure controls or internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter howwell designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of acontrol system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of theinherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, havebeen detected. Failure of our control systems to prevent error or fraud could have a material adverse effect on our business, financial condition and results ofoperations.Compliance with recently adopted rules of the SEC relating to “conflict minerals” may require us and our suppliers to incur substantial expense andmay result in disclosure by us that certain minerals used in products we manufacture are not “DRC conflict free.”Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, required the SEC to promulgate rules requiringdisclosure by a public company of any “conflict minerals” (tin, tungsten, tantalum and gold) necessary to the functionality or production of a productmanufactured or contracted to be manufactured by such company. The SEC adopted final rules in 2012 which took effect at the end of January 2013. Becausewe manufacture products which may contain tin, tungsten, tantalum or gold, we will be required under these rules to determine whether those minerals arenecessary to the functionality or production of our products and, if so, conduct a country of origin inquiry with respect to all such minerals. If any suchminerals may have originated in the Democratic Republic of the Congo, or the DRC, or any of its adjoining countries, or the “covered countries,” then weand our suppliers must conduct diligence on the source and chain of custody of the conflict minerals to determine if they did originate in one of the coveredcountries and, if so, whether they financed or benefited armed groups in the covered countries. Disclosures relating to the products which may containconflict minerals, the country of origin of those minerals and whether they are “DRC conflict free” must be provided in a Form SD (and accompanyingconflict minerals report if one is required to disclose the diligence undertaken by us in sourcing the minerals and our conclusions relating to such diligence).If we are required to submit a conflict minerals report, that report must be audited by an independent auditor pursuant to existing government auditingstandards, unless (for the first two years) we are unable to determine whether the minerals are “DRC conflict free.” Compliance with this new disclosure rulemay be very time consuming for management and our supply chain personnel (as well as time consuming for our suppliers) and could involve theexpenditure of significant amounts of money and resources by us and them. Disclosures by us mandated by the new rules which are perceived by the marketto be “negative” may cause customers to refuse to purchase our products. We are currently unable to assess the cost of compliance with this rule, and wecannot assure you that such cost will not have a material adverse effect on our business, financial condition and results of operations.20  Our business is subject to the risks of earthquakes, fire, power outages, floods, and other catastrophic events, and to interruption by man-madedisruptions, such as terrorism.Our facilities could be subject to a catastrophic loss caused by natural disasters, including fires and earthquakes. If any of our facilities were to experience acatastrophic loss, it could disrupt our operations, delay production and shipments, reduce sales and result in large expenses to repair or replace the facility. Inaddition, we may experience extended power outages at our facilities. Disruption in supply resulting from natural disasters or other causalities or catastrophicevents may result in certain of our suppliers being unable to deliver sufficient quantities of components or raw materials at all or in a timely manner,disruptions in our operations or disruptions in our customers’ operations. To the extent that natural disasters or other calamities or causalities should result indelays or cancellations of customer orders, or the delay in the manufacture or shipment of our products, our business, financial condition and results ofoperations would be adversely affected.Changes in tax laws, tax rates or tax assets and liabilities could materially adversely affect our financial condition and results of operations.As a global company, we are subject to taxation in the United States and various other countries. Significant judgment is required to determine and estimateworldwide tax liabilities. Our future annual and quarterly tax rates could be affected by numerous factors, including changes in applicable tax laws, theamount and composition of pre-tax income in countries with differing tax rates or valuation of our deferred tax assets and liabilities. We have significantoperations in the United States and our holding company structure includes entities organized in the Cayman Islands, Netherlands, Singapore and Scotland.As a result, changes in applicable tax laws in these jurisdictions could have a material adverse effect on our financial condition and results of operations.On December 22, 2017, Congress passed the Tax Cuts and Jobs Act (the “Tax Act”). Among a number of significant changes to the U.S. federal income taxrules, the Tax Act reduces the marginal U.S. corporate income tax rate from 35% to 21%, limits the deduction for net interest expense, limits the deduction fornet operating losses and eliminates net operating loss carrybacks, modifies or repeals many business deductions and credits, shifts the United States toward amore territorial tax system, and imposes new taxes to combat erosion of the U.S. federal income tax base. Our net deferred tax assets and liabilities will berevalued at the newly enacted U.S. corporate rate, and the impact will be recognized in our tax expense in the year of enactment. We continue to examine theimpact this tax reform legislation may have on our business. However, the effect of the Tax Act on us and our affiliates, whether adverse or favorable, isuncertain, and may not become evident for some period of time.We are also subject to regular examination by the Internal Revenue Service and other tax authorities, and from time to time we initiate amendments topreviously filed tax returns. We regularly assess the likelihood of favorable or unfavorable outcomes resulting from these examinations and amendments todetermine the adequacy of our provision for income taxes, which requires estimates and judgments. Although we believe our tax estimates are reasonable, wecannot assure you that the tax authorities will agree with such estimates. We may have to engage in litigation to achieve the results reflected in the estimates,which may be time- consuming and expensive. We cannot assure you that we will be successful or that any final determination will not be materially differentfrom the treatment reflected in our historical income tax provisions and accruals, which could materially and adversely affect our financial condition andresults of operations.Risks Related to Ownership of Our Ordinary SharesThe price of our ordinary shares may fluctuate substantially.You should consider an investment in our ordinary shares to be risky, and you should invest in our ordinary shares only if you can withstand a significantloss and wide fluctuations in the market value of your investment. Some factors that may cause the market price of our ordinary shares to fluctuate, inaddition to the other risks mentioned in this report, are: •our announcements or our competitors’ announcements regarding new products or services, enhancements, significant contracts, acquisitionsor strategic investments; •changes in earnings estimates or recommendations by securities analysts, if any, who cover our ordinary shares; •speculation about our business in the press or investment community; •failures to meet external expectations or management guidance; •fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;21  •changes in our capital structure or dividend policy, future issuances of securities, sales of large blocks of ordinary shares by our shareholders,including Francisco Partners, our incurrence of additional debt or our failure to comply with the agreements governing our Credit Facilities; •our decision to enter new markets; •reputational issues; •changes in general economic and market conditions in any of the regions in which we conduct our business; •material litigation or government investigations; •changes in industry conditions or perceptions; and •changes in applicable laws, rules or regulations.In addition, if the market for stocks in our industry or industries related to our industry, or the stock market in general, experiences a loss of investorconfidence, the trading price of our ordinary shares could decline for reasons unrelated to our business, financial condition and results of operations. If any ofthe foregoing occurs, it could cause our share price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distractionto management.Francisco Partners owns a significant portion of our outstanding equity, and its interests may not always coincide with the interests of other holders.As of December 29, 2017, Francisco Partners owned approximately 15.0% of our ordinary shares. As a result, Francisco Partners could have significantinfluence over all matters presented to our shareholders for approval, including election and removal of our directors, change in control transactions and theoutcome of all actions requiring a majority shareholder approval.In addition, persons associated with Francisco Partners currently serve on our Board. The interests of Francisco Partners may not always coincide with theinterests of the other holders of our ordinary shares, and the concentration of control in Francisco Partners will limit other shareholders’ ability to influencecorporate matters. The concentration of ownership and voting power of Francisco Partners may also delay, defer or even prevent an acquisition by a thirdparty or other change of control of our Company and may make some transactions more difficult or impossible without their support, even if such events arein the best interests of our other shareholders. Therefore, the concentration of voting power of Francisco Partners may have an adverse effect on the price ofour ordinary shares. We may also take actions that our other shareholders do not view as beneficial, which may adversely affect our results of operations andfinancial condition and cause the value of your investment to decline.Future sales of our ordinary shares, or the perception in the public markets that these sales may occur, may depress our share price.Sales of substantial amounts of our ordinary shares in the public market, or the perception that these sales could occur, could adversely affect the price of ourordinary shares and could impair our ability to raise capital through the sale of additional shares. As of December 29, 2017, we had 25,892,162 sharesoutstanding, of which 3,880,513 were beneficially owned by Francisco Partners. Francisco Partners has the right to require us to register the sales of theirshares under the Securities Act of 1933, as amended, or the Securities Act, under the terms of an agreement between us and Francisco Partners. Future sales byFrancisco Partners, or a distribution of shares by Francisco Partners to its limited partners and subsequent sale of such shares in the public market, could causethe trading price of our ordinary shares to decline.22  We are an “emerging growth company” and may elect to comply with reduced public company reporting requirements, which could make ourordinary shares less attractive to investors.We are an emerging growth company, as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may choose to takeadvantage of exemptions from various public company reporting requirements. These exemptions include, but are not limited to, (i) not being required tocomply with the auditor attestation requirements of Section 404 of the Sarbanes‑Oxley Act, (ii) reduced disclosure obligations regarding executivecompensation in our periodic reports, proxy statements and registration statements, and (iii) exemptions from the requirements of holding a nonbindingadvisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We could be an emerginggrowth company for up to five years after the first sale of our ordinary shares pursuant to an effective registration statement under the Securities Act, whichfifth anniversary will occur in December 2021. However, if certain events occur prior to the end of such five‑year period, including if we become a “largeaccelerated filer,” our annual gross revenue exceeds $1.0 billion or we issue more than $1.0 billion of non‑convertible debt in any three‑year period, wewould cease to be an emerging growth company prior to the end of such five‑year period. We have taken advantage of certain of the reduced disclosureobligations regarding executive compensation and may elect to take advantage of other reduced disclosure obligations in our SEC filings. As a result, theinformation that we provide to holders of our ordinary shares may be different than you might receive from other public reporting companies in which youhold equity interests. We cannot predict if investors will find our ordinary shares less attractive as a result of our reliance on these exemptions. If someinvestors find our ordinary shares less attractive as a result of any choice we make to reduce disclosure, there may be a less active trading market for ourordinary shares and the price for our ordinary shares may be more volatile.Under the JOBS Act, emerging growth companies may also elect to delay adoption of new or revised accounting standards until such time as those standardsapply to private companies. We have elected not to avail ourselves of this extended transition period for complying with new or revised accounting standardsand, therefore, we will be subject to the same new or revised accounting standards as other public companies.We do not expect to pay any cash dividends for the foreseeable future.On August 11, 2015, our board of directors approved and we declared a one-time approximately $22.1 million cash dividend on our outstanding preferredshares using proceeds from borrowings under our Credit Facilities and cash on hand. However, we do not anticipate that we will pay any cash dividends onour ordinary shares for the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our board of directors and willdepend upon our financial condition, results of operations, contractual restrictions (including those under our Credit Facilities and any potentialindebtedness we may incur in the future), restrictions imposed by applicable law, tax considerations and other factors our board of directors deems relevant.There can be no assurance that we will pay a dividend in the future or continue to pay any dividend if we do commence paying dividends. Accordingly,realization of a gain on an investment in our ordinary shares will depend on the appreciation of the price of our ordinary shares, which may never occur.Investors seeking cash dividends in the foreseeable future should not purchase our ordinary shares.Our articles of association contain anti-takeover provisions that could adversely affect the rights of our shareholders.Our articles of association contain provisions to limit the ability of others to acquire control of our company or cause us to engage in change-of controltransactions, including, among other things: •provisions that authorize our board of directors, without action by our shareholders, to issue additional ordinary shares and preferred shareswith preferential rights determined by our board of directors; •provisions that permit only a majority of our board of directors or the chairman of our board of directors to call shareholder meetings andtherefore do not permit shareholders to call shareholder meetings; •provisions that impose advance notice requirements, minimum shareholding periods and ownership thresholds, and other requirements andlimitations on the ability of shareholders to propose matters for consideration at shareholder meetings; provided, however, at any time whenFrancisco Partners beneficially owns, in the aggregate, at least 5% of our ordinary shares, such advance notice procedure will not apply to it;and •a staggered board whereby our directors are divided into three classes, with each class subject to re-election once every three years on a rotatingbasis.23  These provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices bydiscouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. With our staggered board of directors, at leasttwo annual meetings of shareholders are generally required in order to effect a change in a majority of our directors. Our staggered board of directors candiscourage proxy contests for the election of our directors and purchases of substantial blocks of our shares by making it more difficult for a potentialacquirer to gain control of our board of directors in a relatively short period of time.The issuance of preferred shares could adversely affect holders of ordinary shares.Our board of directors is authorized to issue preferred shares without any action on the part of holders of our ordinary shares. Our board of directors also hasthe power, without shareholder approval, to set the terms of any such preferred shares that may be issued, including voting rights, dividend rights, andpreferences over our ordinary shares with respect to dividends or if we liquidate, dissolve or wind up our business and other terms. If we issue preferred sharesin the future that have preference over our ordinary shares with respect to the payment of dividends or upon our liquidation, dissolution or winding up, or ifwe issue preferred shares with voting rights that dilute the voting power of our ordinary shares, the rights of holders of our ordinary shares or the price of ourordinary shares could be adversely affected.You may face difficulties in protecting your interests as a shareholder, as Cayman Islands law provides substantially less protection when compared tothe laws of the United States.Our corporate affairs are governed by our amended and restated memorandum and articles of association and by the Companies Law (2013 Revision) andcommon law of the Cayman Islands. The rights of shareholders to take legal action against our directors and us, actions by minority shareholders and thefiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. Thecommon law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English commonlaw, which has persuasive, but not binding, authority on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of ourdirectors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents in the United States. In particular, theCayman Islands have a less exhaustive body of securities laws as compared to the United States. In addition, Cayman Islands companies may not havestanding to initiate a shareholder derivative action before the United States federal courts.As a result of all of the above, our shareholders may have more difficulty in protecting their interests through actions against us or our officers, directors ormajor shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.Certain judgments obtained against us by our shareholders may not be enforceable.We are a Cayman Islands company and a portion our assets are located outside of the United States. As a result, it may be difficult or impossible for you tobring an action against us in the United States in the event that you believe that your rights have been infringed under U.S. federal securities laws orotherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands may render you unable to enforce a judgment againstour assets. There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands willgenerally recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits.There can be no assurance that we will not be a passive foreign investment company for any taxable year, which could result in adverse U.S. federalincome tax consequences to U.S. Holders of our ordinary shares.A non-U.S. corporation will be a passive foreign investment company, or PFIC, for any taxable year if either (i) at least 75% of its gross income for such yearis passive income or (ii) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable toassets that produce or are held for the production of passive income. Our PFIC status for any taxable year can be determined only after the close of that year.Based on the current and anticipated value of our assets and the composition of our income and assets, we do not believe we were treated as a PFIC for U.S.federal income purposes for our taxable year ending December 29, 2017. However, the determination of PFIC status is based on an annual determination thatcannot be made until the close of a taxable year, involves extensive factual investigation, including ascertaining the fair market value of all of our assets on aquarterly basis and the character of each item of income that we earn, and is subject to uncertainty in several respects. Accordingly, we cannot assure you thatwe were not treated as a PFIC for our taxable year ending December 29, 2017, or will not be treated as a PFIC for any future taxable year or that the IRS willnot take a contrary position.24  If we are a PFIC for any taxable year during which a U.S. person holds ordinary shares, certain adverse U.S. federal income tax consequences could apply tosuch U.S. person. You are strongly urged to consult your tax advisors as to whether or not we will be a PFIC.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESOur principal executive office is located at 3185 Laurelview Ct., Fremont, California 94538. As of December 29, 2017, our principal manufacturing andadministrative facilities, including our executive offices, comprises approximately 604,100 square feet. All of our facilities are leased, which allows forflexibility as business conditions and geographic demand change. The table below sets forth the approximate square footage of each of our facilities. Location ApproximateSquareFootage Austin, Texas 25,700 East Blantyre, Scotland 37,700 Fremont, California 55,000 Kingston, New York (1) 71,800 Seoul, Korea 600 Osakis, Minnesota 22,300 Sauk Rapids, Minnesota 58,600 Selangor, Malaysia 31,900 Singapore 76,900 Tampa, Florida 32,600 Tualatin, Oregon 138,200 Union City, California 52,800 (1)Operations ceased as of May 27, 2016. The facility is leased through February 28, 2018. We believe that our existing facilities and equipment are well maintained, in good operating condition and are adequate to meet our currently anticipatedrequirements.ITEM 3. LEGAL PROCEEDINGSWe are currently not a party to any material legal proceedings. However, in the future we may be subject to various legal claims and proceedings which arisein the ordinary course of our business involving claims incidental to our business, including employment-related claims.ITEM 4. MINE SAFETY DISCLOSURESNot applicable. 25  PART IIITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUERPURCHASES OF EQUITY SECURITIESMarket Information for Ordinary SharesOn December 9, 2016, our ordinary shares began trading on NASDAQ under the symbol “ICHR”. Prior to that time, there was no public market for ourordinary shares. Shares sold in our initial public offering were priced at $9.00 per share on December 8, 2016. The following table sets forth the high and lowclosing prices per share of our ordinary shares as reported by the NASDAQ for the period indicated. High Low 2017 Fourth Quarter $34.28 $23.61 Third Quarter $26.80 $18.03 Second Quarter $27.88 $17.14 First Quarter $19.83 $11.55 2016 Fourth Quarter (from December 9, 2016) $11.12 $9.77Holders of RecordOn March 6, 2018, there were 5 holders of record of our ordinary shares. This number does not include shareholders for whom shares are held in “nominee” or“street” name.DividendsWe do not anticipate that we will pay any cash dividends on our ordinary shares for the foreseeable future. Any determination to pay dividends in the futurewill be at the discretion of our board of directors and will depend upon our financial condition, results of operations, contractual restrictions (including thoseunder our Credit Facilities and any potential indebtedness we may incur in the future), restrictions imposed by applicable law, tax considerations and otherfactors our board of directors deems relevant.Recent Sales of Unregistered SecuritiesNone.Stock Performance GraphThe information included under the heading “Stock Performance Graph” is “furnished” and not “filed” for purposes of Section 18 of the Securities ExchangeAct of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed to be “soliciting material” subjectto Regulation 14A or incorporated by reference in any filing under the Securities Act or the Exchange Act.26  Our ordinary shares are listed for trading on the NASDAQ under the symbol “ICHR.” The Stock Price Performance Graph set forth below plots the cumulativetotal shareholder return on a monthly basis of our ordinary shares from December 9, 2016, the date on which our shares began trading, throughDecember 29, 2017, with the cumulative total return of the Nasdaq Composite Index and the PHLX Semiconductor Sector Index over the same period. Thecomparison assumes $100 was invested on December 9, 2016 in the ordinary shares of Ichor Holdings, Ltd., in the Nasdaq Composite Index, and in the PHLXSemiconductor Sector Index and assumes reinvestment of dividends, if any. The stock price performance shown on the graph above is not necessarily indicative of future price performance. Information used in the graph was obtainedfrom the Nasdaq Stock Market, a source believed to be reliable, but we are not responsible for any errors or omissions in such information.27  ITEM 6. SELECTED FINANCIAL DATAThe following tables present our historical selected consolidated financial data. The selected consolidated statement of operations data for fiscal years 2017,2016, and 2015, and the selected balance sheet data as of December 29, 2017 and December 30, 2016, are derived from our audited consolidated financialstatements that are included elsewhere in this report. The selected balance sheet data as of December 25, 2015 is derived from our audited consolidatedbalance sheet as of such date not included in this report.Our historical results are not necessarily indicative of the results that may be expected in the future and interim results are not necessarily indicative of resultsto be expected for the full year. You should read the selected historical financial data below in conjunction with the section titled “Management’s Discussionand Analysis of Financial Condition and Results of Operations” and the financial statements and related notes included elsewhere in this report. Year Ended December 29,2017 December 30,2016 December 25,2015 (in thousands, except share and per share amounts) Consolidated Statement of Operations Data: Net sales $655,892 $405,747 $290,641 Cost of sales (1) 555,131 340,352 242,087 Gross profit 100,761 65,395 48,554 Operating expenses: Research and development (1) 7,899 6,383 4,813 Selling, general and administrative (1) 37,802 28,126 24,729 Amortization of intangible assets 8,880 7,015 6,411 Total operating expenses 54,581 41,524 35,953 Operating income 46,180 23,871 12,601 Interest expense 3,277 4,370 3,831 Other income, net (126) (629) (46)Income from continuing operations before income taxes 43,029 20,130 8,816 Income tax benefit from continuing operations (2) (13,886) (649) (3,991)Net income from continuing operations 56,915 20,779 12,807 Discontinued operations: Loss from discontinued operations before taxes (722) (4,077) (7,406)Income tax expense (benefit) from discontinued operations (261) 40 (225)Net loss from discontinued operations (461) (4,117) (7,181)Net income 56,454 16,662 5,626 Less: Preferred share dividend — — (22,127)Less: Undistributed earnings attributable to preferred shareholders — (15,284) — Net income (loss) attributable to ordinary shareholders $56,454 $1,378 $(16,501)Net income (loss) per share from continuing operations attributable toordinary shareholders: (3) Basic $2.27 $1.14 $(292.39)Diluted $2.17 $0.87 $(292.39)Net income (loss) per share attributable to ordinary shareholders: (3) Basic $2.25 $0.92 $(517.68)Diluted $2.15 $0.70 $(517.68)Shares used to compute net income (loss) from continuing operationsper share attributable to ordinary shareholders: (3) Basic 25,118,031 1,503,296 31,875 Diluted 26,218,424 1,967,926 31,875 Shares used to compute net income (loss) per share attributable toordinary shareholders: (3) Basic 25,118,031 1,503,296 31,875 Diluted 26,218,424 1,967,926 31,87528  Year Ended December 29,2017 December 30,2016 December 25,2015 (in thousands) Consolidated Balance Sheet Data: Cash and restricted cash $69,304 $52,648 $24,188 Working capital $131,233 $56,020 $24,860 Total assets $557,684 $282,491 $198,023 Total long-term debt (4) $189,535 $39,830 $65,000 Preferred shares $— $— $142,728 Total shareholders’ equity $216,762 $141,659 $74,678 (1)Share-based compensation included in the consolidated statement of operations data above was as follows: Year Ended December 29,2017 December 30,2016 December 25,2015 (in thousands) Share-Based Compensation Expense: Cost of sales $118 $20 $105 Research and development 141 35 46 Selling general and administrative 1,971 3,161 967 Total share-based compensation expense $2,230 $3,216 $1,118 (2)During 2017, income tax benefit from continuing operations consists primarily of the impact of foreign operations, including withholding taxes, offset by a$7.6 million tax benefit as a result of our acquisitions (see Note 2 – Acquisitions of our consolidated financial statements included elsewhere in this report), a$5.9 million tax benefit from revaluing our deferred taxes from 35% to 21% due to the Tax Cuts and Jobs Act, and a $1.6 million benefit from re-characterizing intercompany debt to equity between our U.S. and Singapore entities related to the reversal of previously accrued withholding taxes. During2016 and 2015, income tax benefit from continuing operations consisted primarily of the impact of foreign operations, including withholding taxes, offsetby a tax benefit in 2016 as a result of our acquisition (see Note 2 – Acquisitions of our consolidated financial statements included elsewhere in this report). (3)Please see Note 14 – Earnings per Share of our consolidated financial statements included elsewhere in this report for an explanation of the calculations ofour actual basic and diluted net income per share and our pro forma unaudited basic and diluted net income per share. (4)Does not include debt issuance costs of $2.8 million, $1.9 million, and $2.4 million as of December 29, 2017, December 30, 2016, and December 25, 2015,respectively. ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSYou should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financialstatements and related notes included elsewhere in this report. The following discussion contains forward-looking statements based upon our current plans,expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-lookingstatements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this report, particularly in “RiskFactors”.We use a 52 or 53 week fiscal year ending on the last Friday in December. The years ended December 29, 2017, December 30, 2016, and December 25, 2015were 52 weeks, 53 weeks, and 52 weeks, respectively. All references to 2017, 2016, and 2015 are references to fiscal years unless explicitly stated otherwise.29  OverviewWe are a leader in the design, engineering and manufacturing of critical fluid delivery subsystems for semiconductor capital equipment. Our primaryofferings include gas and chemical delivery subsystems, collectively known as fluid delivery subsystems, which are key elements of the process tools used inthe manufacturing of semiconductor devices. Our gas delivery subsystems deliver, monitor and control precise quantities of the specialized gases used insemiconductor manufacturing processes such as etch and deposition. Our chemical delivery subsystems precisely blend and dispense the reactive liquidchemistries used in semiconductor manufacturing processes such as electroplating and cleaning. We also manufacture certain components such as weldmentsand precision machined components for use in fluid delivery systems for direct sales to our customers. This vertically integrated portion of our business isprimarily focused on metal and plastic parts that are used in gas and chemical systems, respectively.Fluid delivery subsystems ensure accurate measurement and uniform delivery of specialty gases and chemicals at critical steps in the semiconductormanufacturing process. Any malfunction or material degradation in fluid delivery reduces yields and increases the likelihood of manufacturing defects inthese processes. Historically, semiconductor OEMs internally designed and manufactured the fluid delivery subsystems used in their process tools. Currently,most OEMs outsource the design, engineering and manufacturing of their gas delivery subsystems to a few specialized suppliers, including us. Additionally,many OEMs are also increasingly outsourcing the design, engineering and manufacturing of their chemical delivery subsystems due to the increased fluidexpertise required to manufacture these subsystems. Outsourcing these subsystems has allowed OEMs to leverage the suppliers’ highly specializedengineering, design and production skills while focusing their internal resources on their own value-added processes. We believe that this outsourcing trendhas enabled OEMs to reduce their fixed costs and development time, as well as provided significant growth opportunities for specialized subsystemssuppliers like us.We have a global footprint with volume production facilities in Malaysia; Singapore; and Tualatin, Oregon; Austin, Texas; Union City, California; Fremont,California; and Sauk Rapids, Minnesota. In 2017, 2016, and 2015, our two largest customers by revenue were Lam Research and Applied Materials. During2017, 2016, and 2015, respectively, we generated revenue of $655.9 million, $405.7 million, and $290.6 million, gross profit of $100.8 million,$65.4 million, and $48.6 million, net income from continuing operations of $56.9 million, $20.8 million, and $12.8 million, and adjusted net income fromcontinuing operations of $65.1 million, $31.6 million, and $20.2 million. Adjusted net income from continuing operations is a financial measure that is notcalculated in accordance with GAAP. See “Non‑GAAP Results” for a discussion of adjusted net income from continuing operations, an accompanyingpresentation of the most directly comparable financial measure calculated in accordance with generally accepted accounting principles in the United States,net income from continuing operations, and a reconciliation of the differences between adjusted net income from continuing operations and net income fromcontinuing operations.Key Factors Affecting Our BusinessInvestment in Semiconductor Manufacturing EquipmentThe design and manufacturing of semiconductor devices is constantly evolving and becoming more complex in order to achieve greater performance andefficiency. To keep pace with these changes, OEMs need to refine their existing products and invest in developing new products. In addition, semiconductordevice manufacturers will continue to invest in new wafer fabrication equipment to expand their production capacity and to support new manufacturingprocesses.Outsourcing of Subsystems by Semiconductor OEMsFaced with increasing manufacturing complexities, more complex subsystems, shorter product lead times, shorter industry spend cycles, and significantcapital requirements, outsourcing of subsystems and components by OEMs has continued to grow. In the past two decades, OEMs have outsourced most oftheir gas delivery systems to suppliers such as us. OEMs have also started to outsource their chemical delivery systems in recent years. Our results will beaffected by the degree to which outsourcing of these fluid delivery systems by OEMs continues to grow.Cyclicality of Semiconductor Device IndustryOur business is indirectly subject to the cyclicality of the semiconductor device industry. In 2017, we derived approximately 93% of our sales from thesemiconductor device industry. Demand for semiconductor devices can fluctuate significantly based on changes in general economic conditions, includingconsumer spending, demand for the products that include these devices and other factors. These fluctuations have in the past resulted in significant variationsin our results of operations. The cyclicality of the semiconductor device industries will continue to impact our results of operations in the future.30  Customer ConcentrationThe number of capital equipment manufacturers for the semiconductor device industry has undergone significant consolidation in recent years, resulting in asmall number of large manufacturers. Our customers have led much of this consolidation, resulting in our sales being concentrated in a few customers. In2017, our two largest customers were Lam Research and Applied Materials, which accounted for approximately 53% and 40% of sales, respectively. The saleswe generated from these customers in 2017 were spread across 35 different product lines utilized in 13 unique manufacturing process steps. We believe thediversity of products that we provide to these customers, combined with the fact that our customers use our products on numerous types of processequipment, lessens the impact of the inherent concentration in the industry. Our customers often require reduced prices or other pricing, quality or deliverycommitments as a condition to their purchasing from us in any given period or increasing their purchase volume, which can, among other things, result inreduced gross margins in order to maintain or expand our market share. Although we do not have any long-term contracts that require customers to placeorders with us, Lam Research and Applied Materials have been our customers for over 10 years.AcquisitionsWe acquired Cal‑Weld, a California-based leader in the design and fabrication of precision, high purity industrial components, subsystems, and systems, inJuly 2017 for $56.9 million. We also acquired Talon, a Minnesota-based leader in the design and manufacturing of high precision machined parts used inleading edge semiconductor tools, in December 2017 for $137.0 million. On a combined basis, these acquisitions contributed approximately $57.5 millionto sales in 2017. We intend to continue to evaluate opportunistic acquisitions to supplement our organic growth, and any such acquisitions could have amaterial impact on our business and results of operations.Discontinued OperationsDiscontinued operations consist of the results of operations for our systems integration business with the primary purpose of building modules and tools(metal organic chemical vapor deposition or ion implant) for Veeco Instruments, Inc. In January 2016, our management and the board of directors decided todiscontinue this business because it consumed a significant amount of resources while generating low gross margins and contributing only a small amount toour net income. We completed our final builds of these products at the end of May 2016.Components of Our Results of OperationsThe following discussion sets forth certain components of our statements of operations as well as significant factors that impact those items.SalesWe generate sales primarily from the design, manufacture and sale of subsystems and components for semiconductor capital equipment. Sales are recognizedwhen persuasive evidence of an arrangement exists, transfer of title has occurred, the fee is fixed or determinable, and collectability is reasonably assured. Ourshipping terms are FOB shipping point or FOB destination, or equivalent terms, and accordingly, sales are recognized when legal title has passed to thecustomer upon shipment or delivery.Cost of Sales and Gross ProfitCost of sales consists primarily of purchased materials, direct labor, indirect labor, factory overhead cost and depreciation expense for our manufacturingfacilities and equipment, as well as certain engineering costs that are related to non-recurring engineering services that we provide to, and for which weinvoice, our customers in connection with their product development activities. Our business has a highly variable cost structure with a low fixed overheadstructure as a percentage of cost of sales. In addition, our existing global manufacturing plant capacity is scalable and we are able to adjust to increasedcustomer demand for our products without significant additional capital investment. We operate our business in this manner in order to avoid havingexcessive fixed costs during a cyclical downturn while retaining flexibility to expand our production volumes during periods of growth. However, thisapproach results in a smaller increase in gross margin as a percentage of sales in times of increased demand.Since the gross margin on each of our products differs, our overall gross margin as a percentage of our sales changes based on the mix of products we sell inany period.31  Operating ExpensesOur operating expenses primarily include research and development and sales, general and administrative expenses. Personnel costs are the most significantcomponent of operating expenses and consist of salaries, benefits, bonuses, share-based compensation and, with regard to sales and marketing expense, salescommissions. Operating expenses also include overhead costs for facilities, IT and depreciation. In addition, our operating expenses include costs related tothe impairment of goodwill and intangible assets, amortization of intangible assets and restructuring costs.Research and development – Research and development expense consists primarily of activities related to product design and other developmentactivities, new component testing and evaluation, and test equipment and fixture development. Research and development expense does notinclude engineering costs that are related to non-recurring engineering services that we provide to and for which we invoice our customers as partof sales, which are reflected as cost of sales. We expect research and development expense will increase in absolute dollars as our customerscontinue to increase their demand for new product designs and as we invest in our research and product development efforts to enhance ourproduct capabilities and access new customer markets.Selling, general and administrative – Selling expense consists primarily of salaries and commissions paid to our sales and sales support employeesand other costs related to the sales of our products. General and administrative expense consists primarily of salaries and overhead associated withour administrative staff, professional fees and depreciation and other allocated facility related costs. We expect selling expenses to increase inabsolute dollars as we continue to invest in expanding our markets and as we expand our international operations. We expect general andadministrative expenses to also increase in absolute dollars due to an increase in costs related to being a public company, including higher legal,corporate insurance and accounting expenses.Amortization of intangibles – Amortization of intangible assets is related to our finite-lived intangible assets and is computed using the straight-line method over the estimated economic life of the asset.Interest Expense, netInterest expense, net consists of interest on our outstanding debt under our Credit Facilities and any other indebtedness we may incur in the future.Other Expense (Income), NetThe functional currency of our international subsidiaries located in the United Kingdom, Singapore and Malaysia is the U.S. dollar. Transactionsdenominated in currencies other than the functional currency generate foreign exchange gains and losses that are included in other expense, net on theaccompanying consolidated statements of operations. Substantially all of our sales and agreements with third party suppliers provide for pricing andpayments in U.S. dollars and, therefore, are not subject to material exchange rate fluctuations.Income Tax BenefitDuring 2017, income tax benefit from continuing operations consists primarily of the impact of foreign operations, including withholding taxes, offset by a$7.6 million tax benefit as a result of our acquisitions (see Note 2 – Acquisitions of our consolidated financial statements included elsewhere in this report), a$5.9 million tax benefit from revaluing our deferred taxes from 35% to 21% due to the Tax Cuts and Jobs Act, and a $1.6 million benefit from re-characterizing intercompany debt to equity between our U.S. and Singapore entities related to the reversal of previously accrued withholding taxes. During2016 and 2015, income tax benefit from continuing operations consisted primarily of the impact of foreign operations, including withholding taxes, offset bya tax benefit in 2016 as a result of our acquisition.32  Results of OperationsThe following table sets forth our results of operations for the periods presented. The period-to-period comparison of results is not necessarily indicative ofresults for future periods. Year Ended December 29,2017 December 30,2016 December 25,2015 (in thousands) Consolidated Statements of Operations Data: Sales $655,892 $405,747 $290,641 Cost of sales 555,131 340,352 242,087 Gross profit 100,761 65,395 48,554 Operating expenses: Research and development 7,899 6,383 4,813 Selling, general, and administrative 37,802 28,126 24,729 Amortization of intangible assets 8,880 7,015 6,411 Total operating expenses 54,581 41,524 35,953 Operating income 46,180 23,871 12,601 Interest expense 3,277 4,370 3,831 Other income, net (126) (629) (46)Income from continuing operations before income taxes 43,029 20,130 8,816 Income tax benefit from continuing operations (13,886) (649) (3,991)Net income from continuing operations 56,915 20,779 12,807 Discontinued operations: Loss from discontinued operations before taxes (722) (4,077) (7,406)Income tax expense (benefit) from discontinued operations (261) 40 (225)Net loss from discontinued operations (461) (4,117) (7,181)Net income $56,454 $16,662 $5,626 The following table sets forth our results of operations as a percentage of our total sales for the periods presented. Year Ended December 29,2017 December 30,2016 December 25,2015 Consolidated Statements of Operations Data: Sales 100.0 100.0 100.0 Cost of sales 84.6 83.9 83.3 Gross profit 15.4 16.1 16.7 Operating expenses: Research and development 1.2 1.6 1.7 Selling, general, and administrative 5.8 6.9 8.5 Amortization of intangible assets 1.4 1.7 2.2 Total operating expenses 8.3 10.2 12.4 Operating income 7.0 5.9 4.3 Interest expense 0.5 1.1 1.3 Other income, net 0.0 (0.2) 0.0 Income from continuing operations before income taxes 6.6 5.0 3.0 Income tax benefit from continuing operations (2.1) (0.2) (1.4)Net income from continuing operations 8.7 5.1 4.4 Discontinued operations: Loss from discontinued operations before taxes (0.1) (1.0) (2.5)Income tax expense (benefit) from discontinued operations 0.0 0.0 (0.1)Net loss from discontinued operations (0.1) (1.0) (2.5)Net income 8.6 4.1 1.933  Comparison of Fiscal Years 2017 and 2016Sales Year Ended Change December 29,2017 December 30,2016 Amount % (dollars in thousands) Sales $655,892 $405,747 $250,145 61.7%The increase in sales from 2016 to 2017 was primarily related to an increase in volume resulting from industry growth, our acquisitions of Cal‑Weld andTalon, and market share gains. The volume increase was due to an approximate 6.1%, or approximately $77.8 million, increase in our market share at our twolargest customers, which includes the acquisitions of Cal‑Weld and Talon, and an approximately $172.3 million increase in the volume of purchasesprimarily by our two largest customers driven by overall industry growth. We refer to the volume of purchases from us by a customer of ours relative to itsother suppliers as our market share of that customer. On a geographic basis, sales in the U.S. increased by $169.9 million in 2017 to $386.6 million. Foreignsales increased by $80.2 million in 2017 to $269.3 million.Cost of Sales and Gross Margin Year Ended Change December 29,2017 December 30,2016 Amount % (dollars in thousands) Cost of sales $555,131 $340,352 $214,779 63.1%Gross profit $100,761 $65,395 $35,366 54.1%Gross margin 15.4% 16.1% - 70 bpsThe increase in cost of sales from 2016 to 2017 was primarily due to the increase in sales volume. The increase in absolute dollars of gross profit was drivenprimarily by an increase in sales volume.As part of our purchase of Talon and Cal‑Weld, we recorded opening inventory at fair value which included a fair value adjustment to inventory of$6.2 million and $3.6 million, respectively. We released a combined $5.2 million of the fair value adjustment to cost of sales based on the sale of inventoryduring 2017. The impact of this charge accounts for a decrease to reported gross margin of 80 basis points for 2017.As discussed in Note 1 – Basis of Presentation to the consolidated financial statements, we recorded a charge to cost of sales of $1.75 million in the secondquarter of 2017 due to the correction of an error related to translating inventory balances at our Singapore and Malaysia subsidiaries. The impact of thischarge accounts for a decrease to reported gross margin of 30 basis points in 2017.Additionally, our gross margins for 2017 were favorably impacted by our acquisitions of Cal‑Weld and Talon, with margins that were accretive to ourhistorical business.Research and Development Year Ended Change December 29,2017 December 30,2016 Amount % (dollars in thousands) Research and development $7,899 $6,383 $1,516 23.8%The increase in research and development expenses from 2016 to 2017 was due to an increase in headcount and consulting expense to support additionalprojects and development programs.34  Selling, General and Administrative Year Ended Change December 29,2017 December 30,2016 Amount % (dollars in thousands) Selling, general, and administrative $37,802 $28,126 $9,676 34.4%The increase in selling, general, and administrative expense from 2016 to 2017 was primarily due to increased acquisition‑related expenses from ouracquisitions of Cal‑Weld and Talon, incremental Cal‑Weld and Talon operating expenses incurred subsequent to the acquisition, increased expensesresulting from the secondary offerings of our ordinary shares by Francisco Partners, increased public company costs, increased incentive compensation onimproved performance to operating targets, and increased headcount expense to support increased sales volume.Selling, general, and administrative expense also increased during 2017 due to a charge of approximately $1.0 million as a result of the final arbitrationruling on our working capital claim with the sellers of Ajax. The ruling was outside of the one year measurement period and not considered to be anadjustment to goodwill, resulting in a charge to selling, general, and administrative expense.Amortization of Intangible Assets Year Ended Change December 29,2017 December 30,2016 Amount % (dollars in thousands) Amortization of intangibles assets $8,880 $7,015 $1,865 26.6%The increase in amortization expense from 2016 to 2017 was due to incremental amortization expense from intangible assets acquired in connection with ouracquisition of Ajax in the second quarter of 2016, and our acquisitions of Talon and Cal‑Weld in the fourth and third quarters of 2017, respectively.The fair value assigned to intangible assets acquired in connection with our acquisitions of Cal‑Weld and Talon is still preliminary. Amortization ofintangible assets may change in future periods depending on the final fair value assigned to the assets.Interest Expense, Net Year Ended Change December 29,2017 December 30,2016 Amount % (dollars in thousands) Interest expense, net $3,277 $4,370 $(1,093) -25.0%The decrease in interest expense, net from 2016 to 2017 was due to a decrease in the average amount borrowed during 2017 as a result of the pay down ofdebt in December 2016 using proceeds from our IPO and a 70 basis point decrease in our average interest rate during 2017 primarily from an amendment toour Credit Facilities in connection with our acquisition of Cal‑Weld, partially offset by an additional $30.0 million in borrowings to fund our acquisition ofCal‑Weld. The additional $120.0 million in borrowings to fund our acquisition of Talon and the related impact on our average interest rate was notsignificant to 2017 results due to the short period of time the additional borrowing were outstanding during 2017.Total borrowings outstanding at December 29, 2017, net of debt issuance costs, was $186.7 million, compared to $37.9 million at December 30, 2016.35  Other Expense (Income), Net Year Ended Change December 29,2017 December 30,2016 Amount % (dollars in thousands) Other expense (income), net $(126) $(629) $503 -80.0%The decrease in other income, net from 2016 to 2017 was primarily due to exchange rate fluctuations on transactions denominated in the local currencies ofour foreign operations, principally the Singapore Dollar, Malaysian Ringgit, and British Pound, partially offset by a gain on the sale of our cost methodinvestment, CHawk Technology International, Inc. (“CHawk”) of $0.2 million that occurred in the first quarter of 2017.Income Tax Benefit from Continuing Operations Year Ended Change December 29,2017 December 30,2016 Amount % (dollars in thousands) Income tax benefit from continuing operations $(13,886) $(649) $(13,237) 2039.6%During 2017, income tax benefit from continuing operations consists primarily of the impact of foreign operations, including withholding taxes, offset by a$7.6 million tax benefit as a result of our acquisitions of Talon and Cal‑Weld, a $5.9 million tax benefit from revaluing our deferred taxes from 35% to 21%due to the Tax Cuts and Jobs Act, and a $1.6 million benefit from re-characterizing intercompany debt to equity between our U.S. and Singapore entitiesrelated to the reversal of previously accrued withholding taxes. This compares to a discrete tax benefit of only $2.3 million in 2016 in connection with ouracquisition of Ajax.Comparison of Fiscal Years 2016 and 2015Sales Year Ended Change December 30,2016 December 25,2015 Amount % (dollars in thousands) Sales $405,747 $290,641 $115,106 39.6%The increase in sales from 2015 to 2016 was primarily related to an increase in sales volume. The sales volume increase was due to an approximate 7%, orapproximately $48.1 million, increase in our market share at our two largest customers, and an approximately $47.0 million increase in the volume ofpurchases by our two largest customers driven by overall industry growth. We refer to the volume of purchases from us by a customer of ours relative to itsother suppliers as our market share of that customer. Ajax contributed $20.0 million to our sales during 2016. On a geographic basis, sales in the UnitedStates increased by $58.9 million in 2016 to $216.6 million. Foreign sales increased by $56.2 million in 2016 to $189.1 million.Cost of Sales and Gross Margin Year Ended Change December 30,2016 December 25,2015 Amount % (dollars in thousands) Cost of sales $340,352 $242,087 $98,265 40.6%Gross profit $65,395 $48,554 $16,841 34.7%Gross margin 16.1% 16.7% - 60 bpsThe increase in cost of sales from 2015 to 2016 was primarily due to the increase in sales.The increase in absolute dollars of gross profit from 2015 to 2016 was driven primarily by an increase in sales volume.36  The decline in gross margin percentage from 2015 to 2016 was primarily due to a decline in margin at individual customers and a shift in customer mixduring 2016.Research and Development Year Ended Change December 30,2016 December 25,2015 Amount % (dollars in thousands) Research and development $6,383 $4,813 $1,570 32.6%The increase in research and development expenses from 2015 to 2016 was due to an increase in headcount and consulting expense to support additionalprojects.Selling, General and Administrative Year Ended Change December 30,2016 December 25,2015 Amount % (dollars in thousands) Selling, general and administrative $28,126 $24,729 $3,397 13.7%The increase in selling, general, and administrative expenses from 2015 to 2016 was due to a $2.1 million increase in share-based compensation expenses,$1.5 million in incremental operating expenses from Ajax, and $1.3 million in acquisition-related transaction costs, partially offset by a $1.4 million decreasein initial public offering expenses. Initial public offering expenses incurred in 2015 were expensed, while those costs incurred in 2016 in relation to ourDecember IPO were offset against proceeds.Interest Expense, Net Year Ended Change December 30,2016 December 25,2015 Amount % (dollars in thousands) Interest expense, net $4,370 $3,831 $539 14.1%The increase in interest expense, net from 2015 to 2016 was due to a $12.9 million increase in the average amount borrowed in 2016 as a result of additionalborrowings used to fund the Ajax acquisition. Prevailing interest rates were comparable during those periods.We paid down $40.0 million of borrowings in December 2016 using proceeds from our IPO. Total borrowings outstanding at December 25, 2015, net of debtissuance costs, was $62.6 million, compared to $37.9 million at December 30, 2016.Other Expense (Income), Net Year Ended Change December 30,2016 December 25,2015 Amount % (dollars in thousands) Other expense (income), net $(629) $(46) $(583) 1267.4%The change in other expense (income), net from 2015 to 2016 was due to exchange rate fluctuations on transactions denominated in the local currencies ofour foreign operations, principally the Singapore Dollar, Malaysian Ringgit, and British Pound. Additionally, we recorded $0.2 million in investment incomein 2016 related to our equity method investment.37  Income Tax Benefit from Continuing Operations Year Ended Change December 30,2016 December 25,2015 Amount % (dollars in thousands) Income tax benefit from continuing operations $(649) $(3,991) $3,342 -83.7%The decrease in the income tax benefit from continuing operations from 2015 to 2016 was primarily due to the valuation allowance against substantially allU.S. federal and state net deferred tax assets which was originally recorded during the fourth quarter of 2015. During the fourth quarter of 2015, wedetermined that it is more likely than not that our U.S. entities will not generate sufficient taxable income to offset reversing deductible temporary differencesand to fully utilize tax attribute carryforwards. As a result, we recorded a valuation allowance to reduce our U.S. federal and state deferred tax assets to theamount that is more likely than not to be realized.Non-GAAP ResultsManagement uses non-GAAP adjusted net income from continuing operations to evaluate Ichor’s operating and financial results. Ichor believes thepresentation of non-GAAP results is useful to investors for analyzing business trends and comparing performance to prior periods, along with enhancinginvestors’ ability to view Ichor’s results from management’s perspective. Non-GAAP adjusted net income from continuing operations is defined as: (1) netincome from continuing operations; (2) excluding amortization of intangible assets, share-based compensation expense, non-recurring expenses includingadjustments to the cost of goods sold and a loss on the Ajax acquisition arbitration settlement, and the tax adjustments related to those non-GAAPadjustments; and (3) non-recurring discrete tax items including tax benefits from acquisitions, the tax benefit from re-characterizing intercompany debt toequity, and the tax impact from enactment of the Tax Act. Non-GAAP adjusted diluted EPS is defined as non-GAAP adjusted net income from continuingoperations divided by adjusted diluted ordinary shares, which assumes the IPO shares sold, conversion of preferred shares into ordinary shares, and vesting ofrestricted shares and options that vested at the IPO occurred at the beginning of the measurement period. No adjustment to GAAP diluted ordinary shares wasnecessary for 2017.The following table presents our non-GAAP adjusted net income from continuing operations and a reconciliation from net income from continuingoperations, the most comparable GAAP measure, for the periods indicated: Year Ended December 29,2017 December 30,2016 December 25,2015 (in thousands, except share and per share amounts) Non-GAAP Data: Net income from continuing operations $56,915 $20,779 $12,807 Non-GAAP adjustments: Amortization of intangible assets 8,880 7,015 6,411 Share-based compensation 2,230 3,216 1,118 Other non-recurring expenses, net (1) 4,767 2,988 4,154 Tax adjustments related to non-GAAP adjustments (626) (131) (4,241)Tax benefit from acquisitions (2) (7,582) (2,271) — Tax benefit from re-characterizing intercompany debt to equity (3) (1,627) — — Tax impact from tax law change (4) (5,911) — — Adjustments to cost of goods sold (5) 1,752 — — Fair value adjustment to inventory from acquisitions (6) 5,230 — — Loss on Ajax acquisition arbitration settlement (7) 1,032 — — Non-GAAP adjusted net income from continuing operations $65,060 $31,596 $20,249 Non-GAAP adjusted diluted EPS $2.48 $1.31 $0.85 Shares used to compute diluted EPS (8) 26,218,424 24,188,881 23,779,908 (1)Included in this amount for 2017 are (i) acquisition-related expenses, (ii) expenses incurred in connection with sales or other dispositions of our ordinaryshares by affiliates of Francisco Partners, (iii) executive search expenses incurred in connection with replacing the Company’s Chief Financial Officer, (iv) arefund of previously paid consulting fees from Francisco Partners Consulting (“FPC”), and (v) a gain on sale of our investment in CHawk. Included in thisamount for 2016 and 2015 are 38  (i) acquisition-related expenses, (ii) bonuses paid to members of our management in connection with the cash dividend paid by us in August 2015,(iii) consulting fees paid to FPC, and (iv) IPO preparation expenses. (2)We recorded $7.6 million in tax benefits during 2017 in connection with our acquisitions of Talon and Cal-Weld. We recorded $2.3 million in tax benefits in2016 in connection with its acquisition of Ajax. (3)In the third quarter of 2017 we re-characterized intercompany debt to equity between our U.S. and Singapore entities resulting in a tax benefit of $1.6 millionrelated to the reversal of previously accrued withholding taxes. (4)This adjustment represents the impact of the Tax Cuts and Jobs Act, including revaluing our deferred tax assets from 35% to 21%. (5)During the second quarter of 2017, we corrected an error related to translating the inventory balances at our Malaysia and Singapore subsidiaries at anincorrect foreign currency rate. The error arose in prior period financial statements beginning in periods prior to 2014 and through 2016. The correctionresulted in a $1.75 million increase in cost of sales and a corresponding decrease in gross profit in our consolidated statement of operations and a decrease toinventories in our consolidated balance sheet during the second quarter of 2017. (6)As part of our purchase price allocation for our acquisition of Talon and Cal‑Weld, we recorded inventory at fair value, resulting in a fair value step‑up toacquired inventory of $6.2 million and $3.6 million, respectively. As the related inventory was sold during 2017, we released $1.6 million and $3.6 millionof Talon and Cal‑Weld’s step‑up, respectively, to cost of sales. (7)During the third quarter of 2017, we received a final arbitration ruling on our working capital claim with the sellers of Ajax. The ruling was outside the oneyear measurement period and therefore could not be considered an adjustment to goodwill, resulting in a charge to selling, general, and administrativeexpense. (8)For 2016 and 2015, assumes the shares sold, the conversion of preferred shares into ordinary shares, and vesting of restricted shares and options inconnection with our December 2016 IPO occurred at the beginning of each period, for comparability between periods. No adjustment to GAAP dilutedordinary shares was necessary for 2017. Non-GAAP adjusted net income from continuing operations has limitations as an analytical tool, and you should not consider it in isolation or as a substitutefor net income or any of our other operating results reported under GAAP. Other companies may calculate adjusted net income differently or may use othermeasures to evaluate their performance, both of which could reduce the usefulness of our adjusted net income as a tool for comparison.Because of these limitations, you should consider non-GAAP adjusted net income from continuing operations alongside other financial performancemeasures, including net income from continuing operations and other financial results presented in accordance with GAAP. In addition, in evaluating non-GAAP adjusted net income, you should be aware that in the future we will incur expenses such as those that are the subject of adjustments in derivingadjusted net income and you should not infer from our presentation of adjusted net income that our future results will not be affected by these expenses orany unusual or non-recurring items.39  Unaudited Quarterly Financial ResultsThe following table set forth statement of operations data for the periods indicated. The information for each of these periods is unaudited and has beenprepared on the same basis as our audited consolidated financial statements included herein and includes all adjustments, consisting only of normal recurringadjustments that we consider necessary for a fair presentation of our unaudited operations data for the periods presented. Historical results are not necessarilyindicative of the results to be expected in the future. Three Months Ended December29,2017 September29,2017 June 30,2017 March 31,2017 December30,2016 September23,2016 June 24,2016 March 25,2016 (in thousands, except share and per share amounts) Sales $182,936 $164,519 $159,733 $148,704 $131,408 $105,687 $95,365 $73,287 Cost of sales 153,892 140,323 136,227 124,689 110,003 88,802 80,185 61,362 Gross profit 29,044 24,196 23,506 24,015 21,405 16,885 15,180 11,925 Operating expenses: Research and development 2,213 1,992 1,950 1,744 2,154 1,564 1,290 1,375 Selling, general and administrative 11,530 11,430 7,984 6,858 7,797 6,782 7,183 6,364 Amortization of intangible assets 3,062 2,220 1,803 1,795 1,805 1,804 1,803 1,603 Total operating expenses 16,805 15,642 11,737 10,397 11,756 10,150 10,276 9,342 Operating income 12,239 8,554 11,769 13,618 9,649 6,735 4,904 2,583 Interest expense 1,173 739 675 690 1,125 1,183 1,160 902 Other expense (income), net 199 73 151 (549) (245) (241) 244 (387)Income (loss) from continuing operations beforeincome taxes 10,867 7,742 10,943 13,477 8,769 5,793 3,500 2,068 Income tax expense (benefit) from continuingoperations (8,328) (6,556) 473 525 778 (1,888) 225 236 Net income from continuing operations 19,195 14,298 10,470 12,952 7,991 7,681 3,275 1,832 Discontinued operations: Income (loss) from discontinued operationsbefore taxes (1) — (610) (111) (64) 16 (2,305) (1,724)Income tax expense (benefit) fromdiscontinued operations (270) 8 — 1 14 23 2 1 Net loss from discontinued operations 269 (8) (610) (112) (78) (7) (2,307) (1,725)Net income 19,464 14,290 9,860 12,840 7,913 7,674 968 107 Less: Preferred share dividend — — — — — — — — Less: Undistributed earnings attributable topreferred shareholders — — — — (5,666) (7,628) (963) (107)Net income attributable to ordinary shareholders $19,464 $14,290 $9,860 $12,840 $2,247 $46 $5 $— Diluted net income per share from continuingoperations attributable to ordinary shareholders:(1) $0.72 $0.54 $0.40 $0.51 $0.39 $0.08 $0.06 $0.03 Diluted net income per share attributable toordinary shareholders: (1) $0.73 $0.54 $0.38 $0.50 $0.38 $0.08 $0.02 $— Shares used to compute diluted net income (loss)per share from continuing operations attributableto ordinary shareholders: 26,656,065 26,278,147 26,063,527 25,640,089 5,870,331 542,949 277,554 249,889 Shares used to compute diluted net income (loss)per share attributable to ordinary shareholders: 26,656,065 26,278,147 26,063,527 25,640,089 5,870,331 542,949 277,554 65,673 (1)See Note 14 – Earnings per Share of our consolidated financial statements included elsewhere in this report for a description of net income per shareattributable to ordinary shareholders presented in conformity with the two-class method, required for participating securities. 40  The following table sets forth our unaudited quarterly consolidated statement of operations data as a percentage of sales for each of the last eight quarters inthe period ended December 29, 2017. Three Months Ended December29,2017 September29,2017 June 30,2017 March 31,2017 December30,2016 September23,2016 June 24,2016 March 25,2016 Sales 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Cost of sales 84.1 85.3 85.3 83.9 83.7 84.0 84.1 83.7 Gross profit 15.9 14.7 14.7 16.1 16.3 16.0 15.9 16.3 Operating expenses: Research and development 1.2 1.2 1.2 1.2 1.6 1.5 1.4 1.9 Selling, general and administrative 6.3 6.9 5.0 4.6 5.9 6.4 7.5 8.7 Amortization of intangible assets 1.7 1.3 1.1 1.2 1.4 1.7 1.9 2.2 Total operating expenses 9.2 9.5 7.3 7.0 8.9 9.6 10.8 12.7 Operating income 6.7 5.2 7.4 9.2 7.3 6.4 5.1 3.5 Interest expense 0.6 0.4 0.4 0.5 0.9 1.1 1.2 1.2 Other expense (income), net 0.1 0.0 0.1 (0.4) (0.2) (0.2) 0.3 (0.5)Income (loss) from continuing operations beforeincome taxes 5.9 4.7 6.9 9.1 6.7 5.5 3.7 2.8 Income tax expense (benefit) from continuingoperations (4.6) (4.0) 0.3 0.4 0.6 (1.8) 0.2 0.3 Net income from continuing operations 10.5 8.7 6.6 8.7 6.1 7.3 3.4 2.5 Discontinued operations: Income (loss) from discontinued operationsbefore taxes 0.0 0.0 (0.4) (0.1) 0.0 0.0 (2.4) (2.4)Income tax expense (benefit) fromdiscontinued operations (0.1) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Net loss from discontinued operations 0.1 0.0 (0.4) (0.1) (0.1) 0.0 (2.4) (2.4)Net income 10.6 8.7 6.2 8.6 6.0 7.3 1.0 0.1SeasonalityWe have not historically experienced meaningful seasonality with respect to our business or results of operations.Liquidity and Capital ResourcesWe had cash and restricted cash of $69.3 million as of December 29, 2017, compared to $52.6 million as of December 30, 2016. Our principal uses ofliquidity are to fund our working capital needs, satisfy our debt obligations, and purchase new capital equipment. The increase in cash is primarily due toproceeds from the issuance of $150.0 million in long-term debt and cash from operations of $38.8 million, partially offset by cash paid for our acquisitions ofCal‑Weld and Talon of $181.0 million and capital expenditures of $8.2 million.We believe that our cash, the amounts available under our Credit Facilities and our cash flows from operations, together with the net proceeds from our IPO,will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least the next 12 months.41  Cash Flow AnalysisThe following table sets forth a summary of operating, investing, and financing activities for the periods presented: Year Ended December 29,2017 December 30,2016 December 25,2015 (in thousands) Cash provided by operating activities $38,803 $27,730 $26,690 Cash used in investing activities (186,751) (21,202) (1,367)Cash provided by (used in) financing activities 164,604 21,932 (15,508)Net increase in cash and restricted cash $16,656 $28,460 $9,815Operating ActivitiesWe generated $38.8 million of cash from operating activities during 2017 due to net income of $56.5 million, partially offset by net non‑cash charges of$(0.2) million and an increase in our net operating assets and liabilities of $17.4 million. Non‑cash charges primarily related to $12.5 million in depreciationand amortization, $2.2 million in share-based compensation, and $0.6 million in amortization of debt issuance cost, offset by $15.3 million in deferred taxbenefit and a gain on the sale of our investment in CHawk of $0.2 million. The increase in net operating assets and liabilities was primarily due to an increasein inventories of $43.4 million in order to meet sales demand in the first quarter of 2018, partially offset by an increase in accounts payable of $22.6 millionand prepaid expenses and other assets of $3.4 million.We generated $27.7 million of cash from operating activities during 2016 due to net income of $16.7 million, non-cash charges of $10.8 million, and a netdecrease of $0.2 million in our net operating assets and liabilities. Non-cash charges primarily related to $9.5 million in depreciation and amortization,$3.2 million in share-based compensation, and $0.5 million in amortization of debt issuance cost, offset in part by $2.4 million in deferred tax benefit. Thedecrease in net operating assets and liabilities was primarily due to an increase in accounts payable of $36.8 million resulting from increased materialspurchased to support higher sales volumes. The decrease in our net operating assets and liabilities was partially offset by an increase of $9.0 million inaccounts receivable due to increased sales and timing of customer payments, an increase in inventory of $23.7 million due to anticipated sales in the firstquarter of 2017, and a decrease in customer deposits of $4.2 million arising from a reduction in customer orders associated with discontinued operations.We generated $26.7 million of cash from operating activities during 2015 due to net income of $5.6 million and non-cash charges of $10.1 million, and a netincrease of $10.9 million in our net operating assets and liabilities. Non-cash charges primarily related to $9.9 million in depreciation and amortization,$1.1 million in share-based compensation, $3.2 million related to the impairment of intangible and fixed assets and $0.5 million write-off of debt issuancecosts, partially offset by $4.9 million in deferred tax benefit. The net change in our operating assets and liabilities was primarily the result of a $9.1 milliondecrease in inventory due to our initiative to reduce our inventory in the fourth quarter of 2015, a decrease in accounts receivable of $6.3 million due to thetiming of customer payments, partially offset by the decrease, in customer deposit of $3.5 million and accounts payable of $1.7 million.Investing ActivitiesCash used in investing activities during 2017 was $186.8 million. We used approximately $137.0 million and $56.9 million to acquire Talon and Cal‑Weld,respectively, and $8.2 million to fund capital expenditures to purchase test fixtures and leasehold improvements primarily related to our plant expansions inthe United States and Malaysia. These outflows were partially offset by proceeds from the sale of our investments in Ajax Foresight Global ManufacturingSdn. Bhd. (“AFGM”) and CHawk and the settlement of a note receivable from AFGM of $2.4 million.Cash used in investing activities during 2016 was $21.2 million. We used $17.4 million, net of cash acquired, to acquire Ajax and $4.3 million from capitalexpenditures to purchase test fixtures and leasehold improvements primarily related to our plant expansions in the United States and Malaysia, partiallyoffset by proceeds from sales of certain intangible and fixed assets totaling $0.5 million.Cash used in investing activities during 2015 was $1.4 million from capital expenditures for the purchase of property and equipment relating to ourmanufacturing footprint in our Oregon, Texas, and corporate facilities.42  Financing ActivitiesWe generated $164.6 million of cash from financing activities during 2017, which primarily consisted of $150.0 million in proceeds from the issuance oflong-term debt to fund our acquisitions of Talon and Cal‑Weld, $9.1 million in proceeds from employees’ and directors’ exercise of stock options, and$7.3 million of proceeds from the exercise of the underwriters’ over‑allotment option in January 2017 in connection with our December 2016 IPO, partiallyoffset by $1.5 million in financing costs associated with the issuance of long-term debt.We generated $21.9 million of cash from financing during 2016, which consisted of net proceeds from our IPO of $47.1 million and $27.0 million ofproceeds from borrowings under our Credit Facilities, partially offset by $52.2 million used to partially repay amounts owed under our Credit Facilities.We used $15.5 million of cash in financing activities during 2015, which consisted of $69.8 million for the repayment of bank borrowings offset in part by$79.0 million in proceeds from new bank borrowings. We also paid cash dividends to our shareholders of $22.1 million and $2.6 million in fees related to therefinancing of our indebtedness, including the entry into our Credit Facilities.Subsequent EventsSubsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. For a description of subsequentevents, please review the information provided in Note 16 – Subsequent Events of our consolidated financial statements in Part IV, Item 15 of this report onForm 10‑K.Credit FacilitiesFor a description of our Credit Facilities, please review the information provided in Note 9 – Credit Facilities of our consolidated financial statementsincluded in Part IV, Item 15 of this report on Form 10‑K.Share Repurchase ProgramIn February 2018, our board of directors authorized a share repurchase program up to $50.0 million under which we may repurchase our ordinary shares in theopen market or through privately negotiated transactions, depending on market conditions and other factors. We expect to fund share repurchases with cashon hand or borrowings under our Revolving Credit Facility. As of the date of this report, the Company has repurchased approximately $5.0 million of itsordinary shares.Contractual Obligations and CommitmentsThe following summarizes our contractual obligations and commitments as of December 29, 2017: Payments Due by Period Total Less Than1 Year 1-3 Years 3-5 Years More Than5 Years (in thousands) Operating leases $11,668 $3,516 $4,775 $3,003 $374 Long-term debt obligations, principal (1) 189,535 6,490 183,045 — — Long-term debt obligations, interest (2) 21,943 7,842 14,101 — — Total $223,146 $17,848 $201,921 $3,003 $374 (1)Represents the contractually required principal payments under our Credit Facilities in accordance with the required principal paymentschedule. (2)Represents the contractually required interest payments under our Credit Facilities in accordance with the required interest paymentschedule. Interest costs have been estimated based on interest rates in effect for such indebtedness as of December 29, 2017. 43  Critical Accounting Policies and EstimatesOur consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of theseconsolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, expenses, andrelated disclosures. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances.We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates. To the extent that there are materialdifferences between these estimates and our actual results, our future financial statements will be affected.The critical accounting policies requiring estimates, assumptions, and judgments that we believe have the most significant impact on our consolidatedfinancial statements are described below.Revenue RecognitionProduct sales are recognized when there is persuasive evidence of an arrangement, product delivery has occurred, the sales price is fixed or determinable, andcollectability is reasonably assured. Our shipping terms are FOB shipping point or FOB destination, or equivalent terms, and accordingly, sales arerecognized when legal title has passed to the customer upon shipment or delivery. Title and risk of loss generally pass to the customer at the time of deliveryof the product to a common carrier. All amounts billed to a customer related to shipping and handling are classified as sales, while all costs incurred by us forshipping and handling are classified as cost of sales.Sales are recognized when all of the following criteria are met: •we enter into a legally binding arrangement with a customer; •we ship the product; •we determine the fee is fixed or determinable based on the payment terms associated with the transaction and free of contingencies orsignificant uncertainties; and •collectability is reasonably assured. We assess collectability based on credit analysis and payment history. We require collateral, typicallycash, in the normal course of business if customers do not meet its criteria established for offering credit.Inventory ValuationWe write down the carrying value of our inventory to net realizable value for estimated obsolescence or unmarketable inventory in an amount equal to thedifference between the cost of inventory and its estimated realizable value based upon assumptions about future demand and market conditions. We assessthe valuation of all inventories, including raw materials, work-in-process, finished goods and spare parts on a periodic basis. Obsolete inventory or inventoryin excess of our estimated usage is written down to its estimated market value less costs to sell, if less than its cost. Inherent in our estimates of demand andmarket value in determining inventory valuation are estimates related to economic trends, future demand for our products and technological obsolescence ofour products. If actual demand and market conditions are less favorable than our projections, additional inventory write-downs may be required. If theinventory value is written down to its net realizable value, and subsequently there is an increased demand for the inventory at a higher value, the increasedvalue of the inventory is not realized until the inventory is sold either as a component of a subsystem or as separate inventory. During 2017, 2016, and 2015,we wrote down $0.9 million, $3.9 million, and $3.0 million, respectively, in inventory determined to be obsolete.Goodwill, Intangibles Assets, and Long-lived AssetsGoodwill is measured as the excess of the cost of an acquisition over the sum of the amounts assigned to identifiable assets acquired less liabilities assumed.We evaluate our goodwill and indefinite life trade name for impairment on an annual basis, and whenever events or changes in circumstances indicate thatthe carrying value may not be fully recoverable. We operate as a single segment and reporting unit. In addition, we evaluate our identifiable intangible assetsand other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.Factors we consider important which could trigger an impairment review include significant changes in the manner of our use of the acquired assets or thestrategy of our overall business; significant decreases in the market price of the asset; significant negative changes in sales of specific products or services;and significant negative industry or economic trends.44  We continually apply judgment when performing these evaluations and continuously monitor for events and circumstances that could negatively impact thekey assumptions in determining fair value, including long-term sales growth projections, undiscounted net cash flows, discount rates, recent marketvaluations from transactions by comparable companies, volatility in our market capitalization and general industry, market and macroeconomic conditions.It is possible that changes in such circumstances, or in the variables associated with the judgments, assumptions and estimates used in assessing fair value,would require us to record a non-cash impairment charge.At December 29, 2017, the date of our last impairment analysis, the fair value of the reporting unit was substantially in excess of its carrying value.Share-Based CompensationOur share-based compensation was $2.2 million, $3.2 million, and $1.1 million during 2017, 2016, and 2015, respectively. Compensation expense related toshare-based transactions, including employee and non-employee stock options, is measured and recognized in the financial statements based on the fairvalue of the awards granted. The fair value of each option award is estimated on the grant date using the Black-Scholes option-pricing model and a singleoption award approach. Share-based compensation expense is recognized, net of forfeitures, over the requisite service periods of the awards, which isgenerally four years.Our use of the Black-Scholes option-pricing model requires the input of subjective assumptions, including the fair value of the underlying ordinary shares,the expected term of the option, and the expected volatility of the price of our ordinary shares, risk-free interest rates, and the expected dividend yield of ourordinary shares. The assumptions used in our option-pricing model represent management’s best estimates. These estimates involve inherent uncertaintiesand the application of management’s judgment. If factors change and different assumptions are used, our share-based compensation expense could bematerially different in the future.These assumptions and estimates are as follows: •Fair Value of Ordinary Shares. Because there was no public market for our ordinary shares prior to our initial public offering, our board ofdirectors determined the fair value of our ordinary shares by considering a number of objective and subjective factors, including valuations ofcomparable companies, operating and financial performance, lack of liquidity of our ordinary shares and general and industry-specificeconomic outlook, among other factors. In addition, we periodically obtained third party valuations to support the determination by our boardof directors of the fair value of our ordinary shares. •Risk-Free Interest Rate. We base the risk-free interest rate used in the Black-Scholes option-pricing model based on the U.S. Treasury rates ineffect during the corresponding period of grant. •Expected Term. We use the simplified method to estimate the expected term of option awards, as the Company does not have sufficienthistory to estimate the weighted average expected term. •Volatility. We determine the price volatility factor based on the historical volatilities of our publicly traded peer group as we did not have atrading history for our ordinary shares prior to our initial public offering. Industry peers consist of several public companies in the industriesthat are similar to us in size, stage of life cycle, and financial leverage. We intend to continue to consistently apply this process using the sameor similar public companies until a sufficient amount of historical information regarding the volatility of the price of our own ordinary sharesshare price becomes available, or unless circumstances change such that the identified companies are no longer similar to us, in which case,more suitable companies whose share prices are publicly available would be utilized in the calculation. •Dividend Yield. The expected dividend assumption is based on our current expectations about our anticipated dividend policy.Consequently, we used an expected dividend yield of zero.Since our initial public offering, our board of directors determines the fair value of each underlying ordinary share based on the closing price of our ordinaryshares as reported on the date of grant.Income TaxesThe determination of our tax provision is highly dependent upon the geographic composition of worldwide earnings and tax regulations governing eachregion and is subject to judgments and estimates. Management carefully monitors the changes in many factors and adjusts the effective tax rate as required.45  The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws. Resolutionof these uncertainties in a manner inconsistent with our expectations could have a material impact on our business, results of operations and financialposition. We believe we have adequately reserved for our uncertain tax positions, however, no assurance can be given that the final tax outcome of thesematters will not be different than what we expect. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit orthe refinement of an estimate. To the extent that the final tax outcome for these matters is different than the amounts recorded, such differences will impactthe provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve positionsand changes to reserves that are considered appropriate, as well as the related net interest and penalties.We file income tax returns in the U.S. federal jurisdiction, various states and various foreign jurisdictions. We are no longer subject to U.S. federalexamination for tax years ending before 2014, to state examinations before 2013 or to foreign examinations before 2012. However, to the extent allowed bylaw, the tax authorities may have the right to examine prior periods where net operating losses or tax credits were generated and carried forward, and makeadjustments up to the amount of the net operating losses or credit carryforward. We are currently enjoying a zero rate tax holiday in Singapore that isscheduled to expire at the end of 2021. This tax rate is subject to maintaining certain commitments agreed to with the Economic Development Board ofSingapore including investment and employment thresholds. Our tax rate could be significantly affected if we do not maintain these commitments or if weare unable to favorably renegotiate the commitment requirements.Recent Accounting PronouncementsFrom time to time, the Financial Accounting Standards Board (“FASB”) or other standards setting bodies issue new accounting pronouncements. Updates tothe FASB Accounting Standards Codification are communicated through issuance of an Accounting Standards Update (“ASU”). Unless otherwise discussed,we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on ourConsolidated Financial Statements upon adoption.To understand the impact of recently issued guidance, whether adopted or to be adopted, please review the information provided in Note 1 – Organizationand Summary of Significant Accounting Policies of our consolidated financial statements in Part IV, Item 15 of this report on Form 10‑K.Off-Balance Sheet ArrangementsAs of December 29, 2017, we did not have any relationships with unconsolidated entities or financial partnerships, such as structured finance or specialpurpose entities, which were established for the purpose of facilitating off-balance sheet arrangements or other purposes.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKWe are exposed to financial market risks, including changes in currency exchange rates and interest rates.Foreign Currency Exchange RiskCurrently, substantially all of our sales and arrangements with third-party suppliers provide for pricing and payment in U.S. dollars and, therefore, are notsubject to material exchange rate fluctuations. As a result, we do not expect foreign currency exchange rate fluctuations to have a material effect on ourresults of operations. However, increases in the value of the U.S. dollar relative to other currencies would make our products more expensive relative tocompeting products priced in such other currencies, which could negatively impact our ability to compete. Conversely, decreases in the value of the U.S.dollar relative to other currencies could result in our foreign suppliers raising their prices in order to continue doing business with us.While not currently significant, we do have certain operating expenses that are denominated in currencies of the countries in which our operations arelocated, and may be subject to fluctuations due to foreign currency exchange rates, particularly the Singapore dollar, Malaysian Ringgit, British Pound andEuro. Fluctuations in foreign currency exchange rates may cause us to recognize transaction gains and losses in our statement of operations. To date, foreigncurrency transaction gains and losses have not been material to our financial statements, and we have not engaged in any foreign currency hedgingtransactions.Interest Rate RiskWe had total indebtedness of $189.5 million as of December 29, 2017, exclusive of unamortized debt issuance costs.46  We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate riskexposure. We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. The interest rate on asignificant majority of our outstanding debt is variable, which also reduces our exposure to these interest rate risks. A hypothetical 10% change in interestrates during any of the periods presented would not have had a material impact on our financial statements.ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAThe financial statements and supplementary financial information required to be filed under this Item 8 are presented beginning on page F‑1 in Part IV,Item 15 of this annual report on Form 10‑K and are incorporated herein by reference.ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURENone.ITEM 9A. CONTROLS AND PROCEDURESEvaluation of Disclosure Controls and ProceduresAs required by Rule 13a‑15(b) under the Exchange Act, we carried out an evaluation under the supervision and with the participation of our management,including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures(as defined in Rules 13a‑15(e) and 15d‑15(e) under the Exchange Act) as of the end of the period covered by this report. There are inherent limitations to theeffectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of thecontrols and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their controlobjectives. We evaluated the effectiveness of our disclosure controls and procedures as of December 29, 2017, with the participation of our CEO and CFO.Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of December 29, 2017.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a‑15(f) and15d‑15(f) under the Exchange Act). With the participation of our Chief Executive Officer and Chief Financial Officer, our management evaluated theeffectiveness of our internal control over financial reporting based on the framework issued by the Committee of Sponsoring Organizations of the TreadwayCommission (“COSO”) in Internal Control—Integrated Framework (2013). Because of its inherent limitations, internal control over financial reporting is notintended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Based on that assessment,management has concluded that its internal control over financial reporting was effective as of December 29, 2017 to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements in accordance with GAAP.We have not engaged an independent registered accounting firm to perform an audit of our internal control over financial reporting as of any balance sheetdate or for any period reported in our financial statements. Our independent public registered accounting firm will first be required to attest to theeffectiveness of our internal control over financial reporting for our Annual Report on Form 10-K for the first year we are no longer an “emerging growthcompany” as defined by the JOBS Act.Remediation of Previously Identified Material WeaknessA company’s internal control over financial reporting is a process designed by, or under the supervision of, a company’s principal executive and principalfinancial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparationof financial statements in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detectmisstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequatebecause of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. If we cannot provide reliable financialinformation, our business, operating results and share price could be negatively impacted.47  During the second quarter of 2017, we identified a material weakness in our internal control over financial reporting related to ineffective periodic riskassessment over control activities that ensure the ending inventory balances of our Malaysia and Singapore subsidiaries were recorded at the appropriate U.S.Dollar functional currency rate. During our previous consolidation process, we had a manual process that translated these inventory balances into the U.S.Dollar functional currency at incorrect rates for these subsidiaries due to system limitations, and we did not implement a control to reconcile the endinginventory balance at our Malaysia and Singapore subsidiaries to the final inventory balance reported in our consolidated financial statements. This materialweakness resulted in an accumulated overstatement of inventory as of March 31, 2017 of approximately $1.75 million. We corrected this overstatement inthe second quarter of 2017 with a charge to cost of sales of $1.75 million. Additionally, we re‑implemented our our Oracle system, which allows for asystems‑based calculation of inventory purchases and ending inventory at the proper U.S. Dollar functional currency rates, and implemented a control toreconcile the final Malaysia and Singapore inventory sub‑ledger balances to the final balances recorded in consolidation. These improvements to ourinternal controls, implemented during 2017, were in place and demonstrated a sustained period of effective operation during 2017 to enable management ofthe Company to conclude the material weakness has been remediated as of December 29, 2017.Changes in Internal Control Over Financial ReportingExcept as set forth above, there have been no changes in our internal control over financial reporting during the quarter ended December 29, 2017 that havematerially affected or are reasonably likely to materially affect, our internal control over financial reporting.ITEM 9B. OTHER INFORMATIONNone.PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe information required by this item is incorporated by reference to our Proxy Statement for our 2018 General Meeting to be filed with the SEC within120 days after the close of the year ended December 29, 2017.Code of ConductThe Company has adopted a code of business ethics and conduct (the “Code of Conduct”) that applies to all employees, officers and directors, including theprincipal executive officer, principal financial officer and principal accounting officer. The Code of Conduct is available on the Company’s website atwww.ichorsystems.com under the Investor Relations tab. The Company intends to post on its website all disclosures that are required by law or NASDAQlisting rules regarding any amendment to, or a waiver of, any provision of the Code of Conduct for the principal executive officer, principal financial officer,principal accounting officer or controller, or persons performing similar functions.ITEM 11. EXECUTIVE COMPENSATIONThe information required by this item is incorporated by reference to our Proxy Statement for our 2018 General Meeting to be filed with the SEC within120 days after the close of the year ended December 29, 2017.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATEDSHAREHOLDER MATTERSThe information required by this item is incorporated by reference to our Proxy Statement for our 2018 General Meeting to be filed with the SEC within120 days after the close of the year ended December 29, 2017.48  ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by this item is incorporated by reference to our Proxy Statement for our 2018 General Meeting to be filed with the SEC within120 days after the close of the year ended December 29, 2017.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESThe information required by this item is incorporated by reference to our Proxy Statement for our 2018 General Meeting to be filed with the SEC within120 days after the close of the year ended December 29, 2017.PART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a)The following documents are filed as a part of this report: (1)Financial Statements.The following Consolidated Financial Statements are filed as part of this report under Item 8 “Financial Statements andSupplementary Data.”Report of Independent Registered Public Accounting FirmF‑1Consolidated Balance SheetsF‑2Consolidated Statements of OperationsF‑3Consolidated Statements of Shareholders’ EquityF‑4Consolidated Statements of Cash FlowsF‑5Notes to Consolidated Financial StatementsF‑6 (2)Exhibits. Exhibits are listed on the Exhibit Index at the end of this report.ITEM 16. FORM 10-K SUMMARYNot applicable. 49  Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsIchor Holdings, Ltd.:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of Ichor Holdings, Ltd. and subsidiaries (the Company) as of December 29, 2017 andDecember 30, 2016, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the years in the three year periodended December 29, 2017, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statementspresent fairly, in all material respects, the financial position of the Company as of December 29, 2017 and December 30, 2016, and the results of itsoperations and its cash flows for each of the years in the three year period ended December 29, 2017, in conformity with U.S. generally accepted accountingprinciples.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on theseconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required tohave, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain anunderstanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internalcontrol over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud,and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosuresin the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion./s/ KPMG LLPWe have served as the Company’s auditor since 2011.Portland, OregonMarch 13, 2018F-1  ICHOR HOLDINGS, LTD.Consolidated Balance Sheets(in thousands, except share and per share data) December 29,2017 December 30,2016 Assets Current assets: Cash $68,794 $50,854 Restricted cash 510 1,794 Accounts receivable, net 49,249 26,401 Inventories, net 154,541 70,881 Prepaid expenses and other current assets 5,357 7,061 Current assets from discontinued operations 3 99 Total current assets 278,454 157,090 Property and equipment, net 34,380 12,018 Other noncurrent assets 1,052 3,574 Deferred tax assets 994 570 Intangible assets, net 73,405 32,146 Goodwill 169,399 77,093 Total assets $557,684 $282,491 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $121,405 $88,531 Accrued liabilities 12,211 6,554 Other current liabilities 6,715 5,421 Current portion of long-term debt 6,490 — Current liabilities from discontinued operations 400 564 Total current liabilities 147,221 101,070 Long-term debt, less current portion, net 180,247 37,944 Deferred tax liabilities 10,558 606 Other non-current liabilities 2,896 1,173 Non-current liabilities from discontinued operations — 39 Total liabilities 340,922 140,832 Shareholders’ equity Preferred shares ($0.0001 par value; 20,000,000 shares authorized; no shares issued andoutstanding) — — Ordinary shares ($0.0001 par value; 200,000,000 shares authorized; 25,892,162 and23,857,381 shares issued and outstanding, respectively) 3 2 Additional paid in capital 214,697 196,049 Retained earnings (accumulated deficit) 2,062 (54,392)Total shareholders’ equity 216,762 141,659 Total liabilities and shareholders’ equity $557,684 $282,491 F-2  ICHOR HOLDINGS, LTD.Consolidated Statements of Operations(in thousands, except share and per share data) Year Ended December 29,2017 December 30,2016 December 25,2015 Net sales $655,892 $405,747 $290,641 Cost of sales 555,131 340,352 242,087 Gross profit 100,761 65,395 48,554 Operating expenses: Research and development 7,899 6,383 4,813 Selling, general, and administrative 37,802 28,126 24,729 Amortization of intangible assets 8,880 7,015 6,411 Total operating expenses 54,581 41,524 35,953 Operating income 46,180 23,871 12,601 Interest expense, net 3,277 4,370 3,831 Other income, net (126) (629) (46)Income from continuing operations before income taxes 43,029 20,130 8,816 Income tax benefit from continuing operations (13,886) (649) (3,991)Net income from continuing operations 56,915 20,779 12,807 Discontinued operations: Loss from discontinued operations before taxes (722) (4,077) (7,406)Income tax expense (benefit) from discontinued operations (261) 40 (225)Net loss from discontinued operations (461) (4,117) (7,181)Net income 56,454 16,662 5,626 Less: Preferred share dividend — — (22,127)Less: Undistributed earnings attributable to preferred shareholders — (15,284) — Net income (loss) attributable to ordinary shareholders $56,454 $1,378 $(16,501)Net income (loss) per share from continuing operations attributable to ordinaryshareholders: Basic $2.27 $1.14 $(292.39)Diluted $2.17 $0.87 $(292.39)Net income (loss) per share attributable to ordinary shareholders: Basic $2.25 $0.92 $(517.68)Diluted $2.15 $0.70 $(517.68)Shares used to compute net income (loss) from continuing operations per shareattributable to ordinary shareholders: Basic 25,118,031 1,503,296 31,875 Diluted 26,218,424 1,967,926 31,875 Shares used to compute net income (loss) per share attributable to ordinaryshareholders: Basic 25,118,031 1,503,296 31,875 Diluted 26,218,424 1,967,926 31,875 F-3  ICHOR HOLDINGS, LTD.Consolidated Statements of Shareholders’ Equity(in thousands, except share data) Retained Additional Earnings Total Preferred Shares Ordinary Shares Paid-In (Accumulated Shareholders' Shares Amount Shares Amount Capital Deficit) Equity Balance at December 26, 2014 17,722,808 $142,728 22,377 $— $1,886 $(54,553) $90,061 Share-based compensation expense — — — — 1,118 — 1,118 Vesting of restricted shares — — 43,032 — — — — Dividend to shareholders — — — — — (22,127) (22,127)Net income — — — — — 5,626 5,626 Balance at December 25, 2015 17,722,808 142,728 65,409 — 3,004 (71,054) 74,678 Ordinary shares issued, net oftransaction costs — — 5,877,778 — 47,103 — 47,103 Conversion of preferred shares toordinary shares (17,722,808) (142,728) 17,722,808 2 142,726 — — Share-based compensation expense — — — — 3,216 — 3,216 Vesting of restricted shares — — 191,386 — — — — Net income — — — — — 16,662 16,662 Balance at December 30, 2016 — — 23,857,381 2 196,049 (54,392) 141,659 Ordinary shares issued from initialpublic offering, net of transactioncosts — — 881,667 1 7,277 — 7,278 Ordinary shares issued from exerciseof stock options 1,078,182 — 9,141 — 9,141 Ordinary shares issued from vestingof restricted share units — — 74,932 — — — — Share-based compensation expense — — — — 2,230 — 2,230 Net income — — — — — 56,454 56,454 Balance at December 29, 2017 — $— 25,892,162 $3 $214,697 $2,062 $216,762 F-4  ICHOR HOLDINGS, LTD.Consolidated Statements of Cash Flows(in thousands) Year Ended December 29,2017 December 30,2016 December 25,2015 Cash flows from operating activities: Net income $56,454 $16,662 $5,626 Adjustments to reconcile net income to net cash provided by operatingactivities: Depreciation and amortization 12,509 9,497 9,936 Gain on sale of investments and settlement of note receivable (241) — — Share-based compensation 2,230 3,216 1,118 Deferred income taxes (15,347) (2,429) (4,927)Amortization of debt issuance costs 608 527 834 Changes in operating assets and liabilities, net of assets acquired: Accounts receivable, net (1,059) (9,007) 6,333 Inventories (43,425) (23,719) 9,110 Prepaid expenses and other assets 3,386 (3,381) 403 Accounts payable 22,612 36,761 (1,676)Accrued liabilities 848 1,612 169 Other liabilities 228 (2,009) (3,396)Net cash provided by operating activities 38,803 27,730 26,690 Cash flows from investing activities: Capital expenditures (8,226) (4,268) (1,367)Cash paid for acquisitions, net of cash acquired (180,955) (17,407) — Proceeds from sale of intangible assets — 230 — Proceeds from sale of property, plant, and equipment — 243 — Proceeds from sale of investments and settlement note receivable 2,430 — — Net cash used in investing activities (186,751) (21,202) (1,367)Cash flows from financing activities: Issuance of ordinary shares, net of fees 7,278 47,103 — Proceeds from exercise of stock options 9,141 — — Dividends to shareholders — — (22,127)Debt issuance and modification costs (1,520) — (2,631)Borrowings under revolving commitment 10,000 12,000 24,000 Repayments on revolving commitment — (22,000) (26,000)Borrowing on long-term debt 140,000 15,000 55,000 Repayments on long-term debt (295) (30,171) (43,750)Net cash provided by (used in) financing activities 164,604 21,932 (15,508)Net increase in cash 16,656 28,460 9,815 Cash and restricted cash at beginning of year 52,648 24,188 14,373 Cash and restricted cash at end of quarter $69,304 $52,648 $24,188 Supplemental disclosures of cash flow information: Cash paid during the period for interest $3,436 $3,686 $2,632 Cash paid during the period for taxes $1,068 $103 $496 Supplemental disclosures of non-cash activities: Capital expenditures included in accounts payable $723 $1,174 $10 F-5  ICHOR HOLDINGS, LTD.Notes to Financial Statements(dollar figures in tables in thousands, except share and per share amounts and percentages)Note 1 – Organization and Summary of Significant Accounting PoliciesOrganization and Operations of the CompanyIchor Holdings, Ltd. and Subsidiaries (the “Company”) designs, develops, manufactures and distributes gas and liquid delivery subsystems and componentspurchased by capital equipment manufacturers for use in the semiconductor markets. The Company is headquartered in Fremont, California and hasoperations in the United States, United Kingdom, Singapore, Malaysia, and South Korea.On December 30, 2011, Ichor Systems Holdings, LLC consummated a sales transaction with Icicle Acquisition Holdings, LLC, a Delaware limited liabilitycompany. Shortly after consummation of the sale transaction, Icicle Acquisition Holdings, LLC changed its name to Ichor Holdings, LLC.In March 2012, Ichor Holdings, LLC completed a reorganization of its legal structure, forming Ichor Holdings, Ltd., a Cayman Islands entity. IchorHoldings, Ltd. is now the reporting entity and the ultimate parent company of the operating entities.In January 2016, the Company decided to shut its Kingston, New York facility which was the primary facility for the Precision Flow Technologies, Inc.subsidiary. In May 2016, the Company ceased operations in this facility and ended the relationship with the customer it served in this location. TheCompany’s consolidated financial statements and accompanying notes for current and prior periods have been retroactively adjusted to present the results ofoperations of the Precision Flow Technologies, Inc. subsidiary as discontinued operations. In addition, the assets and liabilities to be disposed of have beentreated and classified as discontinued operations. For more information on discontinued operations see Note 15 – Discontinued Operations.Basis of PresentationThese consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). Allintercompany balances and transactions have been eliminated upon consolidation. All financial figures presented in the notes to consolidated financialstatements are in thousands, except share, per share, and percentage figures.These consolidated financial statements include the following wholly owned subsidiaries of Ichor Holdings, Ltd.: ▪FP-Ichor Ltd. (Cayman) ▪Icicle Acquisition Holding Coöperatief U.A. ▪Icicle Acquisition Holding B.V. ▪Ichor Holdings Ltd (Scotland). ▪Ichor Systems Ltd. (Scotland) ▪Ichor Holdings, LLC ▪Ichor Systems, Inc. ▪Ichor Systems Malaysia Sdn Bhd ▪Ichor Systems Singapore Pte. Ltd. ▪Precision Flow Technologies, Inc. ▪Ajax-United Patterns & Molds, Inc. ▪Cal-Weld, Inc. ▪Talon Innovations Corporation ▪Talon Innovations (FL) CorporationF-6  Public Offering and Reverse Stock SplitOn December 14, 2016, the Company completed an initial public offering (“IPO”) of 5,877,778 ordinary shares at a price to the public of $9.00 per share. TheCompany received net proceeds from the offering of $47.1 million after offering fees and expenses. The net proceeds were used to repay $40.0 million of theCompany’s loans outstanding under the Company’s Credit Facilities. In January 2017, the Company received $7.3 million, net of fees and expenses, from theexercise of the underwriters’ over‑allotment option to sell an additional 881,667 ordinary shares.Immediately prior to the IPO, the Company amended and restated its memorandum of association to reflect the conversion of all outstanding preferred sharesto 17,722,808 ordinary shares. As part of the IPO, the Company authorized 200,000,000 ordinary shares at $0.0001 par value per share. The Company alsoauthorized the issuance of 20,000,000 preferred shares at $0.0001 par value per share, with no shares outstanding.In connection with the IPO, the Company amended its memorandum of association to effect an 8.053363 for 1 reverse stock split of its common stock.Concurrent with the reverse stock split, the Company adjusted the number of shares subject to, and the exercise price of, its outstanding stock options andrestricted shares under the Company’s 2012 Amended Management Incentive Plan (the “2012 Plan”) so that the holders of the options were in the sameeconomic position both before and after the stock split. As a result of the reverse stock split, all previously reported share and per share amounts, includingoptions in these consolidated financial statements and accompanying notes, have been retrospectively restated to reflect the reverse stock split.Year EndWe use a 52 or 53 week fiscal year ending on the last Friday in December. The years ended December 29, 2017, December 30, 2016, and December 25, 2015were 52 weeks, 53 weeks, and 52 weeks, respectively. All references to 2017, 2016, and 2015 are references to fiscal years unless explicitly stated otherwise.Use of EstimatesThe preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to makeestimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of thefinancial statements and the reported amounts of revenue and expenses during the reporting periods presented. The Company bases its estimates andjudgments on historical experience and on various other assumptions that it believes are reasonable under the circumstances. Actual results could differ fromthe estimates made by management. Significant estimates include the fair value of assets and liabilities acquired in acquisitions, estimated useful lives forlong-lived assets, allowance for doubtful accounts, inventory valuation, uncertain tax positions, fair value assigned to stock options granted, and impairmentanalysis for both definite-lived intangible assets and goodwill.Correction of Immaterial ErrorDuring the second quarter of 2017, we corrected an error related to translating the inventory balances at our Malaysia and Singapore subsidiaries at anincorrect foreign currency rate. The error arose in prior period financial statements beginning in periods prior to 2014 and through 2016. The correctionresulted in a $1.8 million increase in cost of sales and a corresponding decrease in gross profit in our consolidated statements of operations and a decrease toinventories in our consolidated balances sheet during the second quarter of 2017. We evaluated the error on both a quantitative and qualitative basis anddetermined that the error was not material and did not affect the trend of net income or cash flows in previously issued financial statements. Additionally, wedetermined that correcting the error in the second quarter of 2017 did not have a material impact to our consolidated financial statements for 2017.Revenue RecognitionThe Company recognizes revenue in accordance with Accounting Standards Codification (ASC) Topic 605, Revenue Recognition. Product sales arerecognized when there is persuasive evidence of an arrangement, product delivery has occurred, the sales price is fixed or determinable, and collectability isreasonably assured. Product sales typically are recognized at the time of shipment or when the customer takes title of the goods. All amounts billed to acustomer related to shipping and handling are classified as net sales, while all costs incurred by the Company for shipping and handling are classified as costof goods sold.Concentration of Credit RiskFinancial instruments that subject the Company to credit risk consist of accounts receivable, accounts payable and long-term debt.F-7  The Company derived approximately 93%, 97%, and 95% of its revenue from continuing operations from two customers during 2017, 2016, and 2015,respectively. At December 29, 2017 and December 30, 2016, those customers represented, in the aggregate, approximately 61% and 83%, respectively, of theaccounts receivable balance.Accounts receivable are carried at invoice price less an estimate for doubtful accounts and estimated payment discounts. Payment terms vary by customer, butgenerally are due within 15‑60 days. The Company reviews a customer’s credit history before extending credit. The Company establishes an allowance fordoubtful accounts based upon the credit risk of specific customers, historical trends, and other information. Activity and balances related to the Company’sallowance for doubtful accounts is as follows: Allowance fordoubtful accounts Balance at December 26, 2014 $385 Charges to costs and expenses (6)Write-offs (256)Balance at December 25, 2015 123 Charges to costs and expenses 71 Write-offs — Balance at December 30, 2016 194 Charges to costs and expenses 62 Write-offs — Balance at December 29, 2017 $256 The Company requires collateral, typically cash, in the normal course of business if customers do not meet its criteria established for offering credit. If thefinancial condition of the Company’s customers were to deteriorate and result in an impaired ability to make payments, additions to the allowance may berequired. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded to incomewhen received.The Company uses qualified manufacturers to supply many components and subassemblies of its products. The Company obtains the majority of itscomponents from a limited group of suppliers. A majority of the purchased components used in the Company’s products are customer specified. Aninterruption in the supply of a particular component would have a temporary adverse impact on the Company’s operating results.The Company maintains cash balances at both United States-based and foreign-based commercial banks. At various times during the year, cash balances inthe United States will exceed amounts that are insured by the Federal Deposit Insurance Corporation (FDIC). The majority of the cash maintained in foreign-based commercial banks is insured by the government where the foreign banking institutions are based. Cash held in foreign-based commercial banks totaled$36.4 million and $14.7 million at December 29, 2017 and December 30, 2016, respectively. No losses have been incurred at December 29, 2017 andDecember 30, 2016 for the amounts exceeding the insured limits.Fair Value MeasurementsThe Company estimates the fair value of its financial assets and liabilities based upon comparison of such assets and liabilities to the current market valuesfor instruments of a similar nature and degree of risk. The Company utilizes valuation techniques that maximize the use of observable inputs and minimizethe use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricingan asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, thefollowing fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: ▪Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at themeasurement date ▪Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, forsubstantially the full term of the asset or liability ▪Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available,thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement dateThere were no changes to the Company’s valuation techniques during 2017. The Company estimates that the recorded value of its financial assets andliabilities approximates fair value at December 29, 2017 and December 30, 2016.F-8  The Company estimates the value of intangible assets on a nonrecurring basis based on an income approach utilizing discounted cash flows. Under thisapproach, the Company estimates the future cash flows from its asset groups and discounts the income stream to its present value to arrive at fair value. Futurecash flows are based on recently prepared operating forecasts. Operating forecasts and cash flows include, among other things, revenue growth rates that arecalculated based on management’s forecasted sales projections. A discount rate is utilized to convert the forecasted cash flows to their present valueequivalent. The discount rate applied to the future cash flows includes a subject-company risk premium, an equity market risk premium, a beta, and a risk-freerate. As this approach contains unobservable inputs, the measurement of fair value for intangible assets is classified as Level 3.At December 29, 2017 and December 30, 2016, intangible assets passed the recoverability test resulting in no impairment. At December 25, 2015, certainintangibles assets associated with our Kingston facility did not pass the recoverability test, and the Company recorded an impairment charge of $1.8 million.See Note 15 – Discontinued Operations for additional details on the closure of the Kingston, New York location.InventoriesInventories are stated at the lower of cost or market. The majority of inventory values are based upon standard costs that approximate average costs. TheCompany analyzes its inventory levels and records a write-down for inventory that has become obsolete, inventory that has a cost basis in excess of itsexpected net realizable value, and inventory in excess of expected customer demand. Various factors are considered in making this determination, includingrecent sales history and predicted trends, industry market conditions, and general economic conditions.Property and EquipmentProperty, plant and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the followingestimated useful lives: Estimated usefullives of PP&EMachinery 5-10 yearsLeasehold improvements Lesser of 10 yearsor lease termComputer software, hardware, and equipment 3-5 yearsOffice furniture, fixtures, and equipment 5-7 yearsVehicles 5 yearsMaintenance and repairs that neither add materially to the value of the asset nor appreciably prolong its useful life are charged to expense as incurred. Gainsor losses on the disposal of property and equipment are included in selling, general and administrative expenses on the consolidated statements ofoperations.Long-Lived AssetsLong-lived assets are reviewed for impairment whenever events or changes in circumstances indicate, in management’s judgment, that the carrying amount ofan asset (or asset group) may not be recoverable. In analyzing potential impairments, projections of future cash flows from the asset group are used to estimatefair value. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset group, a loss is recognized for the differencebetween the estimated fair value and the carrying value of the asset group. The projections are based on assumptions, judgments and estimates of revenuegrowth rates for the related business, anticipated future economic, regulatory and political conditions, the assignment of discount rates relative to risk, andestimates of terminal values.F-9  Other Non-Current AssetsIn connection with the acquisition of Ajax in 2016, the Company acquired two investments and a note receivable that were recorded at fair value on the dateof acquisition: (i) a cost method investment in CHawk Technology International, Inc. (“CHawk”), (ii) an equity method investment in Ajax Foresight GlobalManufacturing Sdn. Bhd. (“AFGM”), and (iii) a note receivable from AFGM. The Company accounted for the investments on the cost and equity method,respectively, as the Company did not control either entity. During 2016, the Company recorded equity in earnings of AFGM of $0.2 million, which isincluded in other expense (income), net. At December 30, 2016, the investment in CHawk and AFGM and the note receivable from AFGM had carryingbalances of $1.5 million, $0.7 million, and $0.9 million, respectively. The Company sold its investments in CHawk and AFGM and settled its note fromAFGM in January 2017, resulting in a net gain of $0.2 million.Intangible AssetsThe Company accounts for its intangible assets that have a definite life and are amortized on a basis consistent with their expected cash flows over thefollowing estimated useful lives: Estimated usefullives of intangiblesTrademarks 10 yearsCustomer relationships 6-10 yearsDeveloped technology 7-10 years GoodwillGoodwill represents the future economic benefits arising from other assets acquired in a business combination that are not individually identified andseparately recognized. The Company reviews goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying valueof goodwill may not be recoverable. We first make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less thanits carrying amount before applying a quantitative goodwill impairment test. Under the quantitative test, the fair value of the reporting unit is compared to itscarrying value and an impairment loss is recognized for any excess of carrying amount over the reporting unit’s fair value. Fair value of the reporting unit isdetermined using a discounted cash flow analysis. For purposes of testing goodwill for impairment, the Company has concluded it operates in one reportingunit.The Company performed a qualitative goodwill assessment in the fourth quarter of 2017 and 2016. Our goodwill assessment performed in 2017 and 2016indicated that it was more likely than not the reporting unit’s fair value exceeded its carrying value.Research and Development CostsResearch and development costs are expensed as incurred.Warranty CostsThe Company’s product warranties vary by customer, but generally extend for a period of one to two years from the date of sale. Provisions for warranties aredetermined primarily based on historical warranty cost as a percentage of sales, adjusted for specific problems that may arise. Historical product warrantyexpense has not been significant.Advertising CostsThe Company charges advertising costs to operations as incurred. Advertising costs were not significant and are included in selling, general andadministrative expenses in the accompanying consolidated statements of operations.Self-InsuranceThe Company sponsors a self-insured medical plan for employees and their dependents. A third party is engaged to assist in estimating the loss exposurerelated to the self-retained portion of the risk associated with this insurance.F-10  Special BonusOn August 11, 2015, the Board of Directors instituted a special bonus to certain members of management totaling $3.1 million, of which $1.8 million,$0.2 million, and $0.1 million was earned and recorded as a component of selling, general, and administrative, research and development, and cost of sales,respectively, in 2015. The remaining $1.0 million could be earned by certain members of management through the fourth quarter of 2018 based on theircontinued employment. In December 2016 the Board of Directors approved that all remaining special bonus was earned and to be paid in December 2016.During 2016, the Company expensed $0.6 million related to the special bonus, including the amount earned in the fourth quarter of 2016. The remainingamount of the bonus was forfeited due to employee terminations. Management does not expect to pay bonuses of this nature in future periods.Share-Based PaymentsThe Company uses the Black-Scholes option-pricing model to value the awards on the date of grant. The Company uses the simplified method to estimatethe expected term of its share-based awards for all periods, as the Company did not have sufficient history to estimate the weighted average expected term.The risk-free interest rate is based on the U.S. Treasury rates in effect during the corresponding period of grant. Estimated volatility is based on historicalvolatility of the Company and similar entities whose share prices are publicly traded.Income TaxesThe Company recognizes deferred income taxes using the asset and liability method of accounting for income taxes. Under the asset and liability method,deferred income taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted statutory tax rates ineffect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the periodthat includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.Income tax benefit for the current year differs from the statutory rate primarily as a result of revaluing our deferred taxes from 35% to 21% due to the Tax Cutsand Jobs Act, the impact of foreign operations, discrete tax benefits recorded in connection with the Company’s acquisitions of Talon and Cal‑Weld in 2017and Ajax in 2016 (see Note 2 – Acquisitions), and the impact of re-characterizing intercompany debt to equity between our U.S. and Singapore entitiesrelated to the reversal of previously accrued withholding taxes (see Note 7 – Income Taxes).The Company files federal income tax returns, foreign income tax returns, as well as multiple state and local tax returns. The Company is no longer subject toUS Federal examination for tax years ending before 2014, to state examinations before 2013, or to foreign examinations before 2012. However, to the extentallowed by law, the tax authorities may have the right to examine prior periods where net operating losses or tax credits were generated and carried forward,and make adjustments up to the amount of the net operating losses or credit carryforward.When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others may besubject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position isrecognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely thannot that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offsetor aggregated with other positions. Tax positions that meet the more-likely than-not recognition threshold are measured as the largest amount of tax benefitthat is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positionstaken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the Company’s consolidated balancesheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company recognizes interestand penalties as a component of income tax benefit.Foreign OperationsThe functional currency of the Company’s international subsidiaries located in the United Kingdom, Singapore, and Malaysia, is the U.S. dollar. Transactionsdenominated in currencies other than the functional currency generate foreign exchange gains and losses that are included in other expense (income), net onthe accompanying consolidated statements of operations. Substantially, all of the Company’s sales and agreements with third-party suppliers provide forpricing and payments in U.S. dollars and, therefore, are not subject to material exchange rate fluctuations. Foreign operations consist of revenue of$346.0 million, $241.7 million, and $173.7 million during 2017, 2016, and 2015, respectively. Assets of foreign operations totaled $127.2 million and$90.4 million at December 29, 2017 and December 30, 2016, respectively.F-11  Accounting Pronouncements Recently AdoptedIn January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017‑04, Intangibles–Goodwill and Other (Topic 350): Simplifying the Test forGoodwill Impairment (“ASU 2017‑04”), which eliminates Step 2 from the goodwill impairment test. Under Step 2, an entity had to perform procedures todetermine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure thatwould be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments inASU 2017 04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carryingamount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, theloss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitativeassessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017‑04 is effective for goodwill impairment tests in fiscalyears beginning after December 15, 2020, with early adoption permitted for goodwill impairment tests performed after January 1, 2017. The Company testsgoodwill for impairment in the fourth quarter of its fiscal year. The Company adopted ASU 2017‑04 in the fourth quarter of 2017. The adoption did not havean impact on the Company’s financial position or results of operations.Accounting Pronouncements Recently IssuedIn May 2014, the FASB issued ASU No. 2014‑09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014‑09”) and, in August 2015, the FASBissued ASU No. 2015‑14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date ofASU 2014‑09 by one year. ASU 2014‑09 requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount thatreflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosuresrelating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative andquantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs toobtain or fulfill a contract. The standard permits the use of either the retrospective or modified retrospective transition methods. This guidance replaces mostof the existing revenue recognition guidance in U.S. GAAP when it becomes effective, which for us will be at the beginning of the first quarter of fiscal year2018. In April 2016, the FASB issued ASU No. 2016‑10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations andLicensing (“ASU 2016‑10”), which was issued to clarify ASC Topic 606, Revenue from Contracts with Customers, related to (i) identifying performanceobligations; and (ii) the licensing implementation guidance. The effective date and transition of ASU 2016-10 is the same as the effective date and transitionof ASU 2014‑09, Revenue from Contracts with Customers (Topic 606), which for us will be the beginning of the first quarter of fiscal year 2018.We plan to adopt Topic 606 using the modified retrospective method through a cumulative effect adjustment being recognized in retained earnings atDecember 30, 2017, the date of adoption. Under this approach, we will not restate the prior period financial statements.We are currently completing the assessment phase of the implementation project and are finalizing our review of the impact of adoption. We are currently inthe process of developing, implementing and testing our internal systems, processes and controls necessary to adopt Topic 606, and are in process of makingthe necessary changes to our accounting policies and disclosures.Based on our current assessment, we do not anticipate that the adoption of Topic 606 will result in a material cumulative effect adjustment to accumulateddeficit nor have a material impact on our financial position, results of operations, or cash flows, as it is not expected to materially change the manner ortiming of recognizing revenue. We are currently evaluating the impact of the expanded disclosures to our consolidated financial statements.In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). This update establishes a comprehensive lease standard for allindustries. The new standard requires lessees to recognize a right of use asset and a lease liability for virtually all leases, other than leases that meet thedefinition of short term leases. The standard is effective for interim and annual reporting periods beginning after December 15, 2018. The Company iscurrently evaluating the impact of this accounting standard.In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash ("ASU 2016‑18"). This update clarifiesguidance on the classification and presentation of restricted cash in the statement of cash flows. The amendment requires restricted cash be included in anentity's cash and cash-equivalent balances in the statement of cash flows and also requires an entity to disclose information about the nature of therestrictions. Further, a reconciliation between the statement of financial position and the statement of cash flows must be disclosed when the statement offinancial position includes more than one line item for cash, cash equivalents, restricted cash, and restricted cash equivalents. ASU 2016-18 should beapplied on a retrospective basis and is effective for interim and annual reporting periods beginning after December 15, 2017. The Company intends to adoptASU 2016‑18 at the beginning of 2018, and does not expect the adoption to have a material impact on its consolidated financial statements.F-12  In January 2017, the FASB issued ASU No. 2017‑01, Business Combinations (Topic 805): Clarifying the Definition of a Business ("ASU 2017‑01"). Theamendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactionsshould be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017‑01 is effective for interim and annual reporting periods beginningafter December 15, 2017. The Company intends to adopt ASU 2017‑01 at the beginning of 2018, and does not expect the adoption to have a material impacton its consolidated financial statements.Note 2 – AcquisitionsTalon Innovations CorporationOn December 11, 2017, the Company completed the acquisition of Talon Innovations Corporation (“Talon”), a Minnesota-based leader in the design andmanufacturing of high precision machined parts used in leading edge semiconductor tools, for $137.0 million. Talon expands the Company’s capacity andcapabilities in the area of component manufacturing for gas and chemical delivery tools used in semiconductor manufacturing and other industrialapplications.The following table presents the preliminary purchase price allocation as of December 11, 2017: PreliminaryAllocationDecember 11,2017 Cash acquired $5,586 Accounts receivable, net 11,471 Inventories 19,399 Prepaid expenses and other current assets 182 Property and equipment, net 16,655 Other noncurrent assets 76 Intangible assets, net 38,000 Goodwill 74,594 Accounts payable (4,706)Accrued liabilities (2,767)Other current liabilities (1,838)Deferred tax liabilities (19,652)Total acquisition consideration $137,000 The Company preliminarily allocated $32.4 million to customer relationships and $5.6 million to intellectual property with weighted average amortizationperiods of 6 years and 10 years, respectively. Goodwill recognized from the acquisition was primarily attributed to an assembled workforce and expectedsynergies and is not tax deductible. The allocation of acquisition consideration for Talon is preliminary as we have not obtained all of the information tofinalize our procedures on the opening balance sheet or the allocation between goodwill and intangible assets. Management has recorded allocations basedon information currently available. The Company incurred transaction costs of $1.5 million in connection with the acquisition during 2017. The preliminaryinventory fair value adjustment resulted in a $1.6 million charge to cost of sales during 2017.The Company’s consolidated statement of operations for 2017 includes approximately 3 weeks of Talon operating activity, which is not material to theCompany’s 2017 results of operations.F-13  The following unaudited pro forma consolidated results of operations assume the acquisition was completed on December 26, 2015, the beginning of theearliest period presented. Pro forma adjustments are mainly comprised of preliminary estimates of amortization expense related to acquired intangible assets,acquisition-related costs, incremental interest expense from increased borrowings to fund the acquisition, acquired inventory fair value charges, and therelated income tax effects. The pro forma results of operations are presented for informational purposes only and are not indicative of the results of operationsthat would have been achieved or of results that may occur in the future: Year Ended December 29,2017 December 30,2016 Net sales $719,264 $452,195 Net income from continuing operations $58,436 $25,498 Net income per share from continuing operations attributable to ordinaryshareholders: Basic $2.33 $1.40 Diluted $2.23 $1.07 Cal‑Weld, Inc.On July 27, 2017, the Company completed the acquisition of Cal‑Weld, Inc. (“Cal‑Weld”), a California-based leader in the design and fabrication ofprecision, high purity industrial components, subsystems, and systems, for $56.9 million. Cal‑Weld expands the Company’s capacity and capabilities in thearea of component manufacturing for gas delivery tools used in semiconductor manufacturing.The following table presents the preliminary purchase price allocation as of July 27, 2017 and December 29, 2017 and measurement period adjustments.Measurement period adjustments are due to finalizing our procedures on the opening balance sheet and preliminary estimates of fair value of Cal‑Weld: PreliminaryAllocationJuly 27, 2017 MeasurementPeriodAdjustment PreliminaryAllocationDecember 29,2017 Cash acquired $7,337 $— $7,337 Accounts receivable, net 10,318 — 10,318 Inventories 20,836 — 20,836 Prepaid expenses and other current assets 287 113 400 Property and equipment, net 1,639 — 1,639 Other noncurrent assets 587 — 587 Intangible assets, net 12,140 — 12,140 Goodwill 17,957 (223) 17,734 Accounts payable (5,991) (5,991)Accrued liabilities (2,016) 79 (1,937)Other non-current liabilities (908) — (908)Deferred tax liabilities (5,307) 31 (5,276)Total acquisition consideration $56,879 $— $56,879 The Company preliminarily allocated $11.5 million to customer relationships and $0.7 million to order backlog with weighted average amortization periodsof 6 years and 6 months, respectively. Goodwill recognized from the acquisition was primarily attributed to an assembled workforce and expected synergiesand is not tax deductible. The allocation of acquisition consideration for Cal‑Weld is preliminary as we have not obtained all of the information to finalizeour procedures on the opening balance sheet or the allocation between goodwill and intangible assets. Management has recorded allocations based oninformation currently available. The Company incurred transaction costs of $1.9 million in connection with the acquisition during 2017. The inventory fairvalue adjustment resulted in a $3.6 million charge to cost of sales during 2017.The Company’s consolidated statement of operations for 2017 includes approximately 5 months of Cal‑Weld operating activity, including revenue of$53.0 million and net income from continuing operations of $6.7 million.F-14  The following unaudited pro forma consolidated results of operations assume the acquisition was completed on December 26, 2015, the beginning of theearliest period presented. Pro forma adjustments are mainly comprised of amortization expense related to acquired intangible assets, compensation-relatedcosts attributed to non-retained previous ownership, acquisition-related costs, incremental interest expense from increased borrowings to fund theacquisition, acquired inventory fair value charges, and the related income tax effects. The pro forma results of operations are presented for informationalpurposes only and are not indicative of the results of operations that would have been achieved or of results that may occur in the future: Year Ended December 29,2017 December 30,2016 Net sales $725,081 $486,918 Net income from continuing operations $62,540 $29,462 Net income per share from continuing operations attributable to ordinaryshareholders: Basic $2.49 $1.62 Diluted $2.39 $1.24 Ajax-United Patterns & Molds, Inc.On April 12, 2016, the Company completed a stock purchase agreement of Ajax-United Patterns & Molds, Inc. (“Ajax”), a California-based manufacturer ofcomplex plastic and metal products used in the medical, biomedical, semiconductor, data communication and food processing equipment industries, for$17.6 million. The acquisition allows us to manufacture and assemble the complex plastic and metal products required by the medical, biomedical,semiconductor and data communication equipment industries.The following table presents the preliminary purchase price allocation as of April 12, 2016 and December 30, 2016, measurement period adjustments, and thefinal purchase price allocation on April 12, 2017, the end of the measurement period. Measurement period adjustments are primarily related to finalization ofthe valuation of deferred tax liabilities and net identifiable assets and liabilities: PreliminaryAllocationApril 12,2016 MeasurementPeriodAdjustment PreliminaryAllocationDecember 30,2016 MeasurementPeriodAdjustment FinalAllocationApril 12,2017 Cash acquired $187 $— $187 $— $187 Accounts receivable, net 1,245 5 1,250 — 1,250 Inventories 3,236 — 3,236 — 3,236 Prepaid expenses and other current assets 77 — 77 8 85 Property and equipment, net 1,545 — 1,545 (78) 1,467 Other noncurrent assets 2,948 — 2,948 — 2,948 Intangible assets, net 8,130 (100) 8,030 — 8,030 Goodwill 4,629 2,449 7,078 (22) 7,056 Accounts payable and accrued liabilities (4,403) (83) (4,486) 9 (4,477)Deferred tax liabilities — (2,271) (2,271) 83 (2,188)Total acquisition consideration $17,594 $— $17,594 $— $17,594 The Company allocated $8.0 million to customer relationships with a weighted average amortization periods of 10 years. Goodwill recognized from theacquisition was primarily attributed to an assembled workforce and expected synergies and is not tax deductible. The Company incurred transaction costs of$1.5 million in 2016 in connection with the acquisition.The Company’s consolidated statement of operations for 2016 includes approximately 8 months of Ajax operating activity, including revenue of$20.0 million and operating income of $0.6 million.Pro forma financial information has not been provided for the acquisition of Ajax as it was not material to the Company’s current year operations and overallfinancial position.F-15  Note 3 – InventoriesInventory consists of the following: December 29,2017 December 30,2016 Raw materials $91,109 $46,889 Work in process 42,186 22,649 Finished goods 27,268 9,423 Excess and obsolete adjustment (6,022) (8,080)Total inventories, net $154,541 $70,881 The following table presents changes to the Company’s excess and obsolete adjustment: Excess andobsoleteadjustment Balance at December 26, 2014 $(4,067)Charge to cost of sales (3,000)Disposition of inventory 935 Balance at December 25, 2015 (6,132)Charge to cost of sales (3,921)Disposition of inventory 1,973 Balance at December 30, 2016 (8,080)Charge to cost of sales (909)Disposition of inventory 2,967 Balance at December 29, 2017 $(6,022) Note 4 – Property and EquipmentProperty and equipment consist of the following: December 29,2017 December 30,2016 Machinery $23,464 $5,243 Leasehold improvements 15,329 11,276 Computer software, hardware and equipment 4,551 2,848 Office furniture, fixtures and equipment 868 220 Vehicles 51 10 Construction-in-process 2,771 2,069 47,034 21,666 Less accumulated depreciation (12,654) (9,648)Total property and equipment, net $34,380 $12,018 Depreciation expense for 2017, 2016, and 2015 was $3.6 million, $2.5 million, and $3.1 million, respectively.F-16  Note 5 – Intangible Assets and GoodwillDefinite-lived intangible assets consist of the following: December 29, 2017 Gross value Accumulatedamortization Accumulatedimpairmentcharges Carryingamount Weightedaverageuseful lifeTrademarks $9,690 $(5,814) $— $3,876 10.0 yearsCustomer relationships 81,427 (20,060) — 61,367 7.8 yearsDeveloped technology 22,990 (14,938) — 8,052 7.7 yearsBacklog 660 (550) — 110 0.5 yearsTotal intangible assets $114,767 $(41,362) $— $73,405 December 30, 2016 Gross value Accumulatedamortization Accumulatedimpairmentcharges Carryingamount Weightedaverageuseful lifeTrademarks $9,690 $(4,845) $— $4,845 10.0 yearsCustomer relationships 50,557 (17,150) (11,076) 22,331 10.0 yearsDeveloped technology 28,100 (14,975) (8,155) 4,970 6.9 yearsBacklog 30 (30) — — 0.5 yearsTotal intangible assets $88,377 $(37,000) $(19,231) $32,146 Amortization expense totaled $8.9 million, $7.0 million, and $6.9 million during 2017, 2016, and 2015, respectively.Future projected annual amortization expense consists of the following: Futureamortizationexpense 2018 $15,198 2019 12,604 2020 12,604 2021 12,570 2022 8,792 Thereafter 11,637 $73,405 The following tables present the changes to goodwill: Goodwill Balance at December 26, 2014 $70,015 Acquisitions — Impairment — Balance at December 25, 2015 70,015 Acquisitions 7,078 Impairment — Balance at December 30, 2016 77,093 Acquisitions 92,306 Impairment — Balance at December 29, 2017 $169,399 F-17  Note 6 – Commitments and ContingenciesOperating LeasesThe Company leases offices under various operating leases expiring through 2024. The Company is responsible for utilities and its proportionate share ofoperating expenses under the facilities’ leases. The Company recognizes escalating lease payments on a straight-line basis over the lease term. Rent expensefor 2017, 2016, and 2015 was $3.6 million, $2.9 million, and $3.0 million, respectively. Future minimum lease payments for non-cancelable operating leasesas of December 29, 2017 are as follows: Futureminimum leasepayments 2018 $3,516 2019 2,467 2020 2,308 2021 1,788 2022 1,215 Thereafter 374 $11,668 LitigationThe Company is periodically involved in legal actions and claims that arise as a result of events that occur in the normal course of operations. The ultimateresolution of these actions is not expected to have a material adverse effect on the Company’s financial position or results of operations.Note 7 – Income TaxesIn December 2017, the Tax Cuts and Jobs Act (the “2017 Tax Act”) was enacted. The 2017 Tax Act includes a number of changes to existing U.S. tax lawsthat impact the company, most notably a reduction of the U.S. corporate income tax rate from 35% to 21% for tax years beginning after December 31, 2017.The 2017 Tax Act also provides for a one‑time transition tax on certain foreign earnings and the acceleration of depreciation for certain assets placed intoservice after September 27, 2017, as well as prospective changes beginning in 2018, including repeal of the domestic manufacturing deduction, accelerationof tax revenue recognition, capitalization of research and development expenditures, additional limitations on executive compensation, and limitations onthe deductibility of interest.The Company recognized the income tax effects of the 2017 Tax Act in its 2017 financial statements in accordance with Staff Accounting Bulletin (“SAB”)No. 118, which provides SEC staff guidance for the application of ASC Topic 740, Income Taxes, in the reporting period in which the 2017 Tax Act wassigned into law. SAB No. 118 allows registrants to record provisional amounts during a one year “measurement period” similar to that used when accountingfor business combinations. However, the measurement period is deemed to have ended earlier when the registrant has obtained, prepared and analyzed theinformation necessary to finalize its accounting. During the measurement period, impacts of the law are expected to be recorded at the time a reasonableestimate for all or a portion of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, preparedor analyzed. The Company’s financial results reflect the income tax effects of the 2017 Tax Act for which provisional amounts have been made based on areasonable estimate.The changes to existing U.S. tax laws as a result of the 2017 Tax Act, which we believe have the most significant impact on the Company’s federal incometaxes are as follows:Reduction of the U.S. Corporate Income Tax RateThe Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expectedto be recovered or paid. Accordingly, the Company’s deferred tax assets and liabilities were re‑measured to reflect the reduction in the U.S. corporate incometax rate from 35% to 21%, resulting in a $5.9 million increase in income tax benefit for 2017 and a corresponding $5.9 million decrease in net deferred taxliabilities at December 29, 2017.F-18  Transition Tax on Foreign EarningsThe Company recognized a provisional income tax expense of $0.7 million for 2017 related to the one-time transition tax on certain foreign earnings. Thisresulted in a corresponding decrease in deferred tax assets due to the utilization of net operating loss carryforwards. The determination of the transition taxrequires further analysis regarding the amount and composition of the Company’s historical foreign earnings, which is expected to be completed in 2018.Income from continuing operations before tax was as follows: Year Ended December 29,2017 December 30,2016 December 25,2015 United States $370 $(12,553) $(15,319)Foreign 42,659 32,683 24,135 Income from continuing operations before tax $43,029 $20,130 $8,816 Significant components of income tax benefit from continuing operations consist of the following: Year Ended December 29,2017 December 30,2016 December 25,2015 Current: Federal $809 $— $(1,001)State 249 (73) 65 Foreign 397 1,858 1,816 Total current tax expense 1,455 1,785 880 Deferred: Federal (13,251) (2,213) (4,296)State (1,553) — (203)Foreign (537) (221) (372)Total deferred tax benefit (15,341) (2,434) (4,871)Income tax benefit from continuing operations $(13,886) $(649) $(3,991) The reconciliation of income tax computed at the U.S. federal statutory tax rates to income tax benefit from continuing operations consist of the following: Year Ended December 29,2017 December 30,2016 December 25,2015 Effective rate reconciliation: U.S. federal tax expense $15,060 $7,046 $3,084 State income taxes, net (373) (324) (383)Permanent items 2,141 303 92 Foreign rate differential (7,498) (5,907) (4,259)Tax holiday (7,437) (5,714) (3,872)Credits (1,818) (794) (691)Tax contingencies 335 86 (835)Share-based compensation (5,438) 185 22 Withholding tax 840 1,435 925 Impact of re-characterizing intercompany debt to equity 1,409 — — Impact of Tax Cuts and Jobs Act (6,188) — — Other, net (248) 168 (71)Valuation allowance (4,671) 2,867 1,997 Income tax benefit from continuing operations $(13,886) $(649) $(3,991) F-19  Deferred income tax assets and liabilities from continuing operations consist of the following as of: December 29,2017 December 30,2016 Deferred tax assets: Inventory $2,825 $2,159 Share-based compensation 866 1,521 Accrued payroll 1,202 903 Net operating loss carryforwards 4,020 5,274 Transaction costs 63 191 Tax credits 5,851 3,600 Other assets 1,956 2,337 Deferred tax assets 16,783 15,985 Valuation allowance (4,252) (4,888)Total deferred tax assets 12,531 11,097 Deferred tax liabilities: Intangible assets (18,283) (10,830)Property, plant and equipment (3,069) — Other liabilities (743) (303)Total deferred tax liabilities (22,095) (11,133)Net deferred tax liability $(9,564) $(36) At December 29, 2017, the Company had federal and state net operating loss carryforwards of $16.4 million and $13.6 million, respectively. The federal andstate net operating loss carryforwards, if not utilized, will begin to expire in 2031 and 2026, respectively. At December 29, 2017, the Company had federaland state research and development credits of $1.3 million and $0.5 million, respectively. The federal and state research and development credits, if notutilized, will begin to expire in 2032 and 2018, respectively. Additionally, the Company had foreign tax credits of $1.3 million, which if not utilized, willbegin to expire in 2022.We have determined the amount of our valuation allowance based on our estimates of taxable income by jurisdiction in which we operate over the periods inwhich the related deferred tax assets will be recoverable. During 2017, the Company completed the acquisitions of Cal‑Weld and Talon, resulting in a releaseof valuation allowance against the Company’s net deferred tax assets. During the third quarter of 2017, the Company re‑characterized intercompany debt toequity between its U.S. and Singapore entities resulting in a discrete tax benefit of $1.6 million related to the reversal of previously accrued withholdingtaxes. As of December 29, 2017, the Company had determined it was more-likely-than-not to realize its U.S. deferred tax assets and had released all of itsvaluation allowance against its net deferred tax assets, with the exception of foreign tax credits and certain state and foreign net operating loss carryforwardsthe Company believes are not likely to be realized within the carryforward period.The Company was granted a tax holiday for its Singapore operations effective 2011 through 2021. The net impact of the tax holiday in Singapore ascompared to the Singapore statutory rate was a benefit of $7.4 million, $5.7 million, and $3.9 million during 2017, 2016, and 2015, respectively.As of December 29, 2017, the Company has recognized $1.6 million of unrecognized tax benefits in long-term liabilities and $0.3 million of unrecognizedtax benefits in noncurrent deferred tax liabilities on the accompanying consolidated balance sheet. If recognized, $1.8 million of this amount would impactthe Company’s effective tax rate. The Company does not expect a significant decrease to the total amount of unrecognized tax benefits within the nexttwelve months.The Company's ongoing practice is to recognize potential accrued interest and penalties related to unrecognized tax benefits within its global operations inincome tax expense (benefit). During 2017, the Company recognized a net increase of approximately $0.1 million in potential interest and penaltiesassociated with uncertain tax positions in the consolidated statements of operations. At December 29, 2017, the Company had approximately $0.1 millionand $0.4 million of interest and penalties, respectively, associated with uncertain tax positions, which are excluded from the unrecognized tax benefits tablebelow.F-20  The following table summarizes the activity related to the Company’s unrecognized tax benefits: Unrecognizedtax benefits Balance at December 26, 2014 $1,385 Increase in tax positions for current year 85 Decrease in tax positions for prior period (912)Balance at December 25, 2015 558 Increase in tax positions for current year 118 Decrease in tax positions for prior period (100)Balance at December 30, 2016 576 Increase in tax positions for current year 458 Increase in tax positions for prior period 214 Increase in tax positions due to acquisitions 710 Decrease in tax positions for prior period — Impact of Tax Cuts and Jobs Act (48)Balance at December 29, 2017 $1,910 The Company’s three major filing jurisdictions are the United States, Singapore and Malaysia. The Company is no longer subject to US Federal examinationfor tax years ending before 2014, to state examinations before 2013, or to foreign examinations before 2012. However, to the extent allowed by law, the taxauthorities may have the right to examine prior periods where net operating losses or tax credits were generated and carried forward, and make adjustments upto the amount of the net operating losses or credit carryforward.Note 8 – Employee Benefit Programs401(k) PlanThe Company sponsors a 401(k) plan available to employees of its United States-based subsidiaries. Participants may make salary deferral contributions notto exceed 50% of a participant’s compensation in a plan year or the maximum amount otherwise allowed by law. Eligible employees receive a discretionarymatching contribution equal to 50% of each participant’s deferral, up to an annual maximum of two thousand five hundred dollars. For 2017, 2016, and2015, matching contributions were $0.7 million, $0.3 million, and $0.4 million, respectively.Medical InsuranceThe Company sponsors a self-insured group medical insurance plan for its U.S. employees and their dependents. The self-insured plan is designed to providea specified level of coverage, with stop-loss coverage provided by a commercial insurer, in order to limit the Company’s exposure. For 2017, 2016, and 2015,expense incurred related to this plan was $4.1 million, $2.2 million, and $2.8 million, respectively.Note 9 – Credit FacilitiesLong-term debt consists of the following: December 29,2017 December 30,2016 Term loan facility $179,535 $39,830 Revolving credit facility 10,000 — Total principal amount of long-term debt 189,535 39,830 Less unamortized debt issuance costs (2,798) (1,886)Total long-term debt, net 186,737 37,944 Less current portion (6,490) — Total long-term debt, less current portion, net $180,247 $37,944 F-21  Maturities of long-term debt consist of the following: Futurematurities oflong-term debt 2018 $6,490 2019 8,260 2020 174,785 $189,535 The weighted average interest rate across all credit facilities was 4.30%, 5.04%, and 4.86% during 2017, 2016, and 2015, respectively.2015 Credit FacilityOn August 11, 2015, the Company and its subsidiaries entered into a $55.0 million term loan facility and $20.0 million revolving credit facility(collectively, the “2015 Credit Facility”) with a syndicate of lenders and repaid all outstanding indebtedness under the 2011 Credit Facility discussed below.The 2015 Credit Facility also includes a letter of credit subfacility under the revolving credit facility. The Company recorded $2.6 million in debt issuancecosts associated with the 2015 Credit Facility and is amortizing this balance over the term of the facility to interest expense. The Company wrote offpreviously existing debt issuance costs related to the 2011 Credit Facility resulting in an extinguishment loss of $0.5 million, which is included withininterest expense in the accompanying financial statements for 2015.In December 2017, the Company acquired Talon. To fund the acquisition, the Company amended the 2015 Credit Facility to increase the term loan facilityby $120.0 million. The amendment did not meet the definition of an extinguishment and was accounted for as a modification.In July 2017, the Company acquired Cal‑Weld. To fund the acquisition, the Company amended the 2015 Credit Facility to increase the term loan facility by$20.0 million, add an additional $20.0 million of borrowing capacity under its revolving credit facility, and reduce its interest rate. The amendment did notmeet the definition of an extinguishment and was accounted for as a modification.In April 2016, the Company acquired Ajax. To fund the acquisition, the Company amended the 2015 Credit Facility and increased the term loan facility by$15.0 million and drew an additional $4.0 million on the revolving credit facility. The amendment did not meet the definition of an extinguishment and wasaccounted for as a modification.The 2015 Credit Facility is secured by all tangible and intangible assets of the Company and includes customary representations, warranties, and covenants.Additionally, the Company is required to maintain a minimum fixed charge coverage ratio of 1.25 : 1 measured quarterly, and a maximum consolidatedleverage ratio 2.25 : 1.Interest is charged at either the Base Rate or the Eurodollar rate (as such terms are defined in the agreement governing the 2015 Credit Facility) at the optionof the Company, plus an applicable margin. The Base Rate is equal to the higher of i) the Prime Rate, ii) the Federal Funds Effective rate plus 0.5%, or iii) theEurodollar Rate plus 1.00%. The Eurodollar rate is equal to LIBOR. The applicable margin on Base Rate and Eurodollar Rate loans is 1.00‑1.50% and2.00‑2.50% per annum, respectively, depending on the Company’s leverage ratio. Interest payments are due quarterly if loans are made under the Base Rate.Interest payments are due on the last day of the applicable interest period under Eurodollar Rate loans. As of December 29, 2017, $59.5 million of the termloan facility and the revolving credit facility bore interest at the Eurodollar rate option of 4.15%, and the remaining $120.0 million of the term loan facilitybore interest at the Base Rate option of 6.00%.Principal payments are due on a quarterly basis, however, the $25.0 million payment made using proceeds from our IPO in December 2016 was treated as apre-payment, and therefore the Company is only required to make quarterly principal payments of $2.1 million on the additional $140.0 million borrowed inconnection with the July and December 2017 amendments. The 2015 Credit Facility matures in August 2020.Under the revolving credit facility, the Company is able to borrow an amount equal to the lesser of i) $5.0 million and ii) the revolving credit facility under aswingline loan. The borrowing availability under the swingline loan is a sublimit to the revolving commitment.F-22  Note 10 – Shareholders’ EquityPreferred SharesPrior to the December 2016 IPO, the Company’s preferred shares had the following characteristics:Conversion—The holders of preferred shares may convert to common stock at any time at the option of the holder, and the preferred shares will automaticallyconvert to common stock upon a majority vote of the holders of preferred stock. The conversion price is equal to the ratio of the original issuance pricedivided by the conversion price.Liquidation preference—In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company, the preferred shareholders areentitled to receive an amount per share equal to the greater of (i) The original issuance price plus any dividends declared but unpaid or (ii) an amount pershare that would have been payable assuming conversion to common stock immediately prior to a liquidation event. Any remaining assets of the Companyafter the initial liquidation preference will be made to the common stock holders on a pro rata basis. If the assets of the Company are not sufficient for the fullliquidation preference, the holders will share in any distribution on a pro rata basis.Voting—Preferred shareholders have voting rights based on the number of shares of common stock into which the preferred shares can convert.Dividends—Preferred shareholders are entitled to receive dividends when and if declared by the Board of Directors. In August 2015, the Board of Directorsapproved and paid a cash dividend totaling $22.1 million to the preferred shareholders.At the IPO, all outstanding preferred shares were converted into 17,722,808 ordinary shares.Note 11 – Related Party TransactionsThe Company purchased certain parts from Ajax Foresight Global Manufacturing Sdn. Bhd. (“AFGM”), an investment acquired in conjunction with theacquisition of Ajax. Total purchases from AFGM were $0.2 million and $0.7 million in 2017 and 2016, respectively. Outstanding accounts payable to AFGMtotaled $0.3 million December 30, 2016. During February 2017, the Company sold its investment in AFGM, and therefore no related party relationship existson a go‑forward basis.The Company received advisory services from Francisco Partners Management, L.P. (“FPM”), an entity affiliated with certain of the Company’s principalshareholders through our December 2016 IPO, at which time the Company’s advisory agreement with FPM was terminated. Under the advisory agreement, theCompany was obligated to pay FPM an annual advisory fee equal to $1.5 million per year. Such advisory fee was waived for all periods presented in whichthe advisory agreement was effective.The Company also received consulting services from Francisco Partners Consulting, LLC (“FPC”), an entity that provides consulting services to the privateequity funds managed by FPM and their portfolio companies on a dedicated basis, through our December 2016 IPO, at which time the Company’s agreementwith FPC was terminated and such services ceased. FPC is not an affiliate of the Company, FPM, or any of the Company’s principal shareholders, and none ofthe Company’s principal shareholders hold an in interest in FPC. During 2017, the Company received from FPC a refund of previously paid consulting feesof $0.3 million. During 2016 and 2015, the Company paid $0.5 million and $0.3 million, respectively, to FPC for consulting services.On January 10, 2011, PFT entered into a sublease agreement with Precision Flow Inc., which was majority owned by a member of the board of directors of theCompany. During 2016 and 2015, PFT paid $1.0 million and $1.2 million, respectively, in sublease rent to Precision Flow Inc. The sublease agreementbetween PFT and Precision Flow Inc. expires February 28, 2018. The Company has ceased operations in this facility as of May 2016 but has not completed alease termination agreement with Precision Flow Inc. This board member resigned in 2016, and therefore no related party relationship exists going forward.The Company had purchases totaling $0.1 million and $0.8 million from Ceres, an entity owned by a member of the board of directors of the Company,during 2016 and 2015, respectively. The Company had sales totaling $0.2 million and $0 during 2016 and 2015. This board member resigned in 2016, andtherefore no related party relationship exists going forward.F-23  Note 12 – Share-Based Compensation2016 PlanIn December 2016, the Company adopted the 2016 Omnibus Incentive Plan (“the 2016 Plan”). Under the 2016 Plan, 1,888,000 ordinary shares are reservedfor issuance. The number of shares reserved for issuance under the 2016 Plan increases annually beginning in fiscal year 2018 by the lesser of (i) 2% of theordinary shares outstanding on the last day of the immediately preceding fiscal year or (ii) such amount determined by the Board. Awards may be in the formof options, tandem and non-tandem stock appreciation rights, restricted shares, performance awards, and other share based awards and can be issued toemployees, directors, and consultants. Canceled or expired awards under the 2016 Plan are returned to the incentive plan pool for future grants.Awards granted under the 2016 Plan generally have a term of 7 years. Vesting generally occurs 25% on the first anniversary of the date of grant, and quarterlythereafter over the remaining 3 years.2012 PlanIn March 2012, the Company adopted the Ichor Holdings Ltd. 2012 Equity Incentive Plan (the “2012 Plan”). Under the 2012 Plan, the Company can granteither restricted shares or stock options to employees, directors and consultants. The Board of Directors initially authorized the issuance of 21,000,000 stockoptions or restricted shares under the 2012 Plan. On October 25, 2013, the Board of Directors authorized the issuance of an additional 4,000,000 stockoptions or restricted shares under the 2012 Plan. Canceled or expired stock options or restricted shares are returned to the incentive plan pool for futuregrants.Stock options granted under the 2012 Plan generally have a term of 7 years. Vesting generally occurs 25% on the first anniversary of the date of grant, andquarterly thereafter over the remaining 3 years.There have been no issuances of equity-based awards under the 2012 Plan since the adoption of the 2016 Plan.Stock OptionsThe table below sets forth the weighted average assumptions used to measure the fair value of options granted: Year Ended December 29,2017 December 30,2016 December 25,2015 Weighted average expected term 5 years 5 years 5 years Risk-free interest rate 1.9% 1.3% 1.4%Dividend yield 0.0% 0.0% 0.0%Volatility 47.7% 50.0% 50.0% The following table summarizes the Company’s stock option activity during 2017: Number of Stock Options Timevesting Performancevesting Weightedaverageexercise priceper share Weightedaverageremainingcontractual term Aggregateintrinsic value(in thousands) Outstanding, December 30, 2016 1,948,307 215,908 $8.87 Granted 604,700 — $19.57 Exercised (1,078,182) — $8.48 Forfeited (22,000) — $18.69 Expired — — $— Outstanding, December 29, 2017 1,452,825 215,908 $12.87 4.2 years $19,662 Exercisable, December 29, 2017 682,560 215,908 $9.29 2.7 years $13,754 F-24  Fair value information for options granted and the intrinsic value of options exercised are as follows: Year Ended December 29,2017 December 30,2016 December 25,2015 Weighted average grant-date fair value of options granted $8.52 $4.18 $4.18 Total intrinsic value of options exercised $16,423 N/A N/A At December 29, 2017, total unrecognized share-based compensation expense relating to stock options was $5.0 million, with a weighted average remainingservice period of 3.3 years.Restricted SharesThe following table summarizes the Company’s restricted share activity during 2017: Number ofRestrictedOrdinaryShares Time vesting Weighted averagegrant date fairvalue Unvested, December 30, 2016 103,055 $8.39 Granted 125,158 $19.63 Vested (74,932) $8.46 Forfeited — $— Unvested, December 29, 2017 153,281 $17.53 Fair value information for restricted shares granted and vested during is as follows: Year Ended December 29,2017 December 30,2016 December 25,2015 Weighted average grant-date fair value of shares granted $19.63 $9.42 N/A Total fair value of shares vested $634 $1,484 $296 At December 29, 2017, total unrecognized share-based compensation expense relating to restricted shares was $2.3 million, with a weighted averageremaining service period of 3.4 years.During 2017, 2016, and 2015, share-based compensation expense for stock options and restricted shares across all plans totaled $2.2 million, $3.2 million,and $1.1 million, respectively.2017 ESPPIn May 2017, the Company adopted the 2017 Employee Stock Purchase Plan (the “2017 ESPP”), which provides employees the ability to designate a portionof their base-pay to purchase ordinary shares at a price equal to 85% of the fair market value of ordinary shares on the first or last day of each 6 monthpurchase period. Purchase periods begin on January 1 or July 1 and end on June 30 or December 31, or next business day if such date is not a business day.Shares are purchased on the last day of the purchase period. 2,500,000 ordinary shares are reserved for issuance under the 2017 ESPP. The current purchaseperiod began on August 7, 2017 and ends on January 2, 2018. No shares were issued under the 2017 ESPP during 2017.The table below sets forth the weighted average assumptions used to measure the fair value of 2017 ESPP rights: Year Ended December 29,2017 December 30,2016 December 25,2015Weighted average expected term 0.4 years N/A N/ARisk-free interest rate 1.1% N/A N/ADividend yield 0.0% N/A N/AVolatility 47.8% N/A N/AF-25  The Company recognizes share-based compensation expense associated with the 2017 ESPP over the duration of the purchase period. The Companyrecognized an insignificant amount of share-based compensation expense associated with the 2017 ESPP during 2017. At December 29, 2017, there was nounrecognized share-based compensation expense.Note 13 – Segment InformationThe Company’s Chief Operating Decision Maker (CODM), the Chief Executive Officer, reviews the Company’s results of operations on a consolidated leveland executive staff is structured by function rather than by product category. Therefore, the Company operates in one operating segment. Key resources,decisions, and assessment of performance are also analyzed on a company-wide level.The Company’s foreign operations are conducted primarily through its wholly owned subsidiaries in Singapore and Malaysia. The Company’s principalmarkets include North America, Asia and, to a lesser degree, Europe. Sales by geographic area represent sales to unaffiliated customers.All information on sales by geographic area is based upon the location to which the products were shipped. The following table sets forth sales by geographicarea (including sales from discontinued operations): Year Ended December 29,2017 December 30,2016 December 25,2015 United States of America $386,645 $243,237 $238,470 Singapore 223,277 163,515 96,141 Europe 27,555 16,353 22,938 Other 18,415 9,218 13,840 Total net sales $655,892 $432,323 $371,389 The following table sets forth the Company’s two major customers, which comprised 93%, 97%, and 95% of sales from continuing operations in 2017, 2016,and 2015, respectively: Year Ended December 29,2017 December 30,2016 December 25,2015 Lam Research $350,372 $207,230 $165,133 Applied Materials $259,234 $185,465 $111,661 Note 14 – Earnings per ShareBasic and diluted net income per share attributable to ordinary shareholders was presented in conformity with the two-class method during 2016 and 2015,required for participating securities, as the Company had two classes of stock until its December 2016 IPO. The Company considered its convertible preferredshares to be a participating security as the convertible preferred shares participated in dividends with ordinary shareholders, when and if declared by theboard of directors. In the event a dividend was paid on ordinary shares, the holders of preferred shares were entitled to a proportionate share of any suchdividend as if they were holders of ordinary shares (on an as-if converted basis). The convertible preferred shares did not participate in losses incurred by theCompany. In accordance with the two-class method, earnings allocated to these participating securities and the related number of outstanding shares of theparticipating securities, which include contractual participation rights in undistributed earnings, have been excluded from the computation of basic anddiluted net income per share attributable to ordinary shareholders.Under the two-class method, net income attributable to ordinary shareholders after deduction of preferred share dividends, if any, is determined by allocatingundistributed earnings between the ordinary shares and the participating securities based on their respective rights to receive dividends. Basic net income(loss) per share attributable to ordinary shareholders is computed by dividing net income (loss) attributable to ordinary shareholders by the weighted-averagenumber of ordinary shares outstanding during the period. All participating securities are excluded from basic weighted-average ordinary shares outstanding.Diluted net income (loss) per share attributable to ordinary shareholders is computed by dividing net income (loss) attributable to ordinary shareholders bythe weighted average number of ordinary shares outstanding, including all potentially dilutive ordinary shares, if the effect of each class of potential shares ofordinary shares is dilutive.F-26  For purposes of calculating EPS under the two-class method, an accounting policy election has been made to treat each income statement line item (netincome from continuing operations, net income (loss) from discontinued operations, and net income) as an independent calculation and only allocateearnings to participating securities for those line items for which income is reported, as the participating securities do not have a contractual obligation toparticipate in losses. There is therefore no allocation of losses to participating securities for those line items for which a loss is reported. Under this method,the sum of the individual EPS income statement line items will not reconcile to the total net income (loss) per share.Net income per share was not presented in conformity with the two‑class method during 2017, as the Company had only one class of stock outstanding.F-27  The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share attributable to ordinary shareholders and areconciliation of the numerator and denominator used in the calculation: Year Ended December 29,2017 December 30,2016 December 25,2015 Numerator: Net income from continuing operations $56,915 $20,779 $12,807 Preferred share dividend — — (22,127)Undistributed earnings attributed to preferred shareholders — (19,060) — Net income (loss) from continuing operations, attributable to ordinaryshareholders $56,915 $1,719 $(9,320)Net loss from discontinued operations $(461) $(4,117) $(7,181)Undistributed earnings attributed to preferred shareholders — — — Preferred share dividend — — — Net loss from discontinued operations, attributable to ordinaryshareholders $(461) $(4,117) $(7,181)Net income $56,454 $16,662 $5,626 Preferred share dividend — — (22,127)Undistributed earnings attributed to preferred shareholders — (15,284) — Net income (loss), attributable to ordinary shareholders $56,454 $1,378 $(16,501)Denominator: Weighted average ordinary shares outstanding 25,118,031 1,503,296 31,875 Dilutive effect of stock options 1,030,793 306,871 — Dilutive effect of restricted shares 68,184 157,759 — Dilutive effect of employee share purchase plan 1,416 — — Weighted average number of shares used in diluted per share calculationfor net income (loss) from continuing operations 26,218,424 1,967,926 31,875 Weighted average ordinary shares outstanding 25,118,031 1,503,296 31,875 Dilutive effect of stock options — — — Dilutive effect of restricted shares — — — Dilutive effect of employee share purchase plan — — — Weighted average number of shares used in diluted per share calculationfor net loss from discontinued operations 25,118,031 1,503,296 31,875 Weighted average ordinary shares outstanding 25,118,031 1,503,296 31,875 Dilutive effect of stock options 1,030,793 306,871 — Dilutive effect of restricted shares 68,184 157,759 — Dilutive effect of employee share purchase plan 1,416 — — Weighted average number of shares used in diluted per share calculationfor net income (loss) 26,218,424 1,967,926 31,875 Net income (loss) per share attributable to ordinary shareholders: Continuing operations: Basic $2.27 $1.14 $(292.39)Diluted $2.17 $0.87 $(292.39)Discontinued operations: Basic $(0.02) $(2.74) $(225.29)Diluted $(0.02) $(2.74) $(225.29)Total: Basic $2.25 $0.92 $(517.68)Diluted $2.15 $0.70 $(517.68) F-28  An aggregated total of 72,321, 165,275, and 519,576 potential ordinary shares have been excluded from the computation of diluted net income (loss) pershare attributable to ordinary shareholders for 2017, 2016, and 2015, respectively, because including them would have been antidilutive.Note 15 – Discontinued OperationsIn January 2016, we made the decision to shut down our Kingston, New York facility as this location consumed a significant amount of resources whilecontributing very little income. We completed the shutdown of the operations of the New York facility in May 2016 through abandonment as a buyer for thefacility and operation was not found. We recognized additional expense consisting of fixed asset and long-lived asset impairments totaling $3.2 million inthe fourth quarter of 2015 related to this decision. The impairments related to fixed assets and long lived assets were based on the estimated fair value of suchassets over their remaining expected lives through May 2016. No further sales are being generated from the customer that this location serviced afterMay 2016.The Company ceased operations at this facility in May 2016. As this was our cease use date, the Company recorded lease abandonment and inventorycharges of approximately $0.6 million and $2.0 million, respectively, in the second quarter of 2016. At December 29, 2017, future minimum lease paymentsof $0.3 million are reflected in accrued liabilities of discontinued operations.The carrying amounts of the major classes of assets and liabilities of the Kingston, New York facility are reflected in the following table: December 29,2017 December 30,2016 Assets Current assets: Prepaid expenses and other current assets $3 $99 Total current assets 3 99 Total assets $3 $99 Liabilities Current liabilities: Accounts payable $136 $152 Accrued liabilities 255 360 Other current liabilities 9 52 Total current liabilities 400 564 Deferred tax liabilities — 30 Other long-term liabilities — 9 Total liabilities $400 $603 The results of the discontinued operation were as follows: Year Ended December 29,2017 December 30,2016 December 25,2015 Net sales $— $26,576 $80,748 Cost of sales — 28,077 80,840 Operating expenses: Research and development — 262 954 Selling, general, and administrative 722 2,315 2,765 Amortization of intangible assets — — 475 Total operating expenses 722 2,577 4,194 Operating income (loss) (722) (4,078) (4,286)Interest income, net — — (16)Other expense, net — (1) 3,136 Income (loss) from discontinued operations before income taxes (722) (4,077) (7,406)Income tax expense (261) 40 (225)Loss from discontinued operations $(461) $(4,117) $(7,181) F-29  Supplemental information related to the discontinued operation is as follows for the periods presented: Year Ended December 29,2017 December 30,2016 December 25,2015 Depreciation and amortization $— $— $1,143 Capital expenditures $— $— $427 Impairment of property and equipment $— $— $1,335 Impairment of intangible assets $— $— $1,825 Write-down of inventory $— $1,999 $1,506 Note 16 – Subsequent Events (unaudited)Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. The Company recognizes in theconsolidated financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of thebalance sheet, including the estimates inherent in the process of preparing the financial statements. The Company's consolidated financial statements do notrecognize subsequent events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after the balance sheet dateand before financial statements are issued. In preparing these consolidated financial statements, the Company has evaluated events and transactions forpotential recognition or disclosure through March 13, 2018, the date the consolidated financial statements were issued.Modification of Equity AwardsOn January 18, 2018, in connection with the separation of our previous Chief Financial Officer (“previous CFO”) from the Company, the General Release ofAll Claims (the “General Release”) became effective. Pursuant to our previous CFO’s Transition Agreement, separation benefits begin on the date the GeneralRelease becomes effective. Included in the separation benefits is a vesting acceleration of all outstanding and unvested stock options and restricted shares.Consequently, 88,445 stock options and 39,175 restricted shares vested on January 18, 2018. This was accounted for as a modification under ASC Topic 718and resulted in approximately $2.9 million in share-based compensation expense. All 88,445 modified stock options were exercised on February 12, 2018.Refinance of Long-Term DebtOn February 15, 2018, the Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) to refinance all outstandingindebtedness under the 2015 Credit Facility. The agreement features a $175.0 million term loan facility and a revolving facility allowing for borrowings upto $125.0 million. The Credit Agreement decreases the applicable interest rate for borrowings under the term loan facility and revolving facility by25 basis points and extends the maturity from August 2020 to February 2023. Additionally, the Credit Agreement (i) increases the maximum leverage ratio to3.0x and (ii) changes the leverage ratios such that the Company is not required to use excess cash flow to prepay amounts owed under the credit facility whenits leverage ratio is less than 2.0x. The effect of this debt refinance has not been recognized in these consolidated financial statements.Share Repurchase ProgramIn February 2018, our board of directors authorized a share repurchase program up to $50.0 million under which we may repurchase our ordinary shares in theopen market or through privately negotiated transactions, depending on market conditions and other factors. We expect to fund share repurchases, if any,with cash on hand or borrowings under our Revolving Credit Facility. As of the date of this report, the Company has repurchased approximately $5.0 millionin ordinary shares. F-30  EXHIBIT INDEXThe following exhibits are filed with this Form 10‑K or are incorporated herein by reference: ExhibitNumber Description of Exhibit 2.1 Stock Purchase Agreement, dated as of July 27, 2017, by and among Ichor Holdings, LLC, Cal-Weld, Inc., Richard A. Olazaba RevocableTrust u/d/t dated March 9, 2011, and, with respect to Section 9.14 therein only, Richard A. Olazaba (Incorporated by reference to Exhibit2.1 to the current report on Form 8-K filed with the Securities and Exchange Commission on July 31, 2017). 2.2* Stock Purchase Agreement, dated as of December 11, 2017, by and among Ichor Holdings, Ltd., Talon Innovations Corporation, TalonInnovations Holdings LLC and the guarantors party thereto. 3.1 Amended and Restated Memorandum and Articles of Association of Ichor Holdings, Ltd., effective as of December 9, 2016 (Incorporatedby reference to Exhibit 3.1 to the current report on Form 8‑K filed with the Securities and Exchange Commission on December 14, 2016). 10.1 Credit Agreement, dated as of August 11, 2015, by and among Ichor Holdings, LLC, Precision Flow Technologies, Inc. and IchorSystems, Inc., as borrowers, Icicle Acquisition Holding B.V. and certain of its other subsidiaries as guarantors, Bank of America, N.A. asadministrative agent, L/C issuer, and swingline lender, and the lenders from time to time party thereto, or the Credit Agreement(Incorporated by reference to Exhibit 10.1 to Ichor Holdings, Ltd’s Registration Statement on Form S‑1, filed with the Securities andExchange Commission on November 14, 2016). 10.2 First Amendment to Credit Agreement, dated as of April 12, 2016, by and among Ichor Holdings, LLC, Ichor Systems, Inc. and PrecisionFlow Technologies, Inc., as borrowers, Bank of America, N.A., as administrative agent, and the financial institutions party thereto, aslenders (Incorporated by reference to Exhibit 10.2 to Ichor Holdings, Ltd’s Registration Statement on Form S‑1, filed with the Securitiesand Exchange Commission on November 14, 2016). 10.3 Investor Rights Agreement, dated as of March 16, 2012, by and among Ichor Holdings, Ltd. and certain of its shareholders (Incorporated byreference to Exhibit 10.3 to Ichor Holdings, Ltd’s Registration Statement on Form S‑1, filed with the Securities and Exchange Commissionon November 14, 2016). 10.4+ Employment Agreement, dated as of September 19, 2014, by and among Ichor Systems, Inc., Thomas Rohrs and, with respect toSections 1.2 and 3.4 therein only, Ichor Holdings, Ltd (Incorporated by reference to Exhibit 10.7 to Ichor Holdings, Ltd’s RegistrationStatement on Form S‑1, filed with the Securities and Exchange Commission on November 14, 2016). 10.5+ Employment Agreement, dated as of September 19, 2014, by and among Ichor Systems, Inc., Maurice Carson and, with respect toSections 1.2 and 3.3 therein only, Ichor Systems, Ltd (Incorporated by reference to Exhibit 10.8 to Ichor Holdings, Ltd’s RegistrationStatement on Form S‑1, filed with the Securities and Exchange Commission on November 14, 2016). 10.6+ Ichor Holdings, Ltd. 2016 Omnibus Incentive Plan (Incorporated by reference to Exhibit 10.11 to Ichor Holdings, Ltd’s Amendment No. 2to Registration Statement on Form S‑1, filed with the Securities and Exchange Commission on November 29, 2016). 10.7+ Form of Incentive Stock Option Agreement (Incorporated by reference to Exhibit 10.12 to Ichor Holdings, Ltd’s Amendment No. 2 toRegistration Statement on Form S‑1, filed with the Securities and Exchange Commission on November 29, 2016). 10.8+ Form of Restricted Stock Agreement (Incorporated by reference to Exhibit 10.13 to Ichor Holdings, Ltd’s Amendment No. 2 to RegistrationStatement on Form S‑1, filed with the Securities and Exchange Commission on November 29, 2016). 10.9+ Form of Nonqualifed Stock Option Agreement (Incorporated by reference to Exhibit 10.14 to Ichor Holdings, Ltd’s Amendment No. 2Registration Statement on Form S‑1, filed with the Securities and Exchange Commission on November 29, 2016).  10.10+ Offer Letter, dated as of January 8, 2013, by and between Ichor Systems, Inc. and Philip Barros (Incorporated by reference to Exhibit 10.16to Ichor Holdings, Ltd’s Registration Statement on Form S‑1, filed with the Securities and Exchange Commission on November 14, 2016). 10.11+ Offer Letter, dated as of September 30, 2015, by and between Ichor Systems, Inc. and Philip Barros (Incorporated by reference toExhibit 10.17 to Ichor Holdings, Ltd’s Registration Statement on Form S‑1, filed with the Securities and Exchange Commission onNovember 14, 2016). 10.12 Transition Agreement, dated June 29, 2017, between Ichor Systems, Inc. and Maurice Carson (Incorporated by reference to Exhibit 10.1 tothe current report on Form 8‑K filed with the Securities and Exchange Commission on June 29, 2017). 10.13 Second Amendment to the Credit Agreement, dated as of July 27, 2017, by and among Ichor Holdings, LLC, Ichor Systems, Inc., PrecisionFlow Technologies, Inc., Ajax‑United Patterns & Molds, Inc. and Cal‑Weld, Inc., as borrowers, Bank of America, N.A., as administrativeagent, and the financial institutions party thereto, as lenders (Incorporated by reference to Exhibit 10.1 to the current report on Form 8‑Kfiled with the Securities and Exchange Commission on July 31, 2017) 10.14*+ Offer Letter, dated as of July 20, 2017, between Ichor Systems, Inc. and Kevin Canty 10.15*+ Offer Letter, dated as of November 9, 2017, between Ichor Systems, Inc. and Jeffrey Andreson 10.16* Third Amendment to the Credit Agreement, dated December 11, 2017, by and among Ichor Holdings, LLC, Ichor Systems, Inc., PrecisionFlow Technologies, Inc., Ajax United Patterns & Molds, Inc., Cal‑Weld, Inc., Talon Innovations Corporation, as borrowers, the guarantorsnamed therein, Bank of America, N.A., as administrative agent, and the financial institutions party thereto, as lenders. 21.1* List of subsidiaries 23.1* Consent of KPMG LLP 31.1* Certifications of Chief Executive Officer of the Company under Rule 13a‑14(a) of the Securities Exchange Act of 1934, as amended, asadopted pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002. 31.2* Certifications of Chief Financial Officer of the Company under Rule 13a‑14(a) of the Securities Exchange Act of 1934, as amended, asadopted pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002. 32.1* Certifications of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑OxleyAct of 2002. This certification accompanies this report and shall not, except to the extent required by the Sarbanes‑Oxley Act of 2002, bedeemed filed for purposes of §18 of the Securities Exchange Act of 1934, as amended. 32.2* Certifications of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Actof 2002. This certification accompanies this report and shall not, except to the extent required by the Sarbanes‑Oxley Act of 2002, bedeemed filed for purposes of §18 of the Securities Exchange Act of 1934, as amended. *Filed herewith+A management contract or compensatory arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S‑K  SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized. Dated: March 13, 2018ICHOR HOLDINGS, LTD. By: /s/ Thomas M. Rohrs Thomas M. RohrsExecutive Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrantand in the capacities and on the dates indicated. Signature Name and Title Date /s/ Thomas M. RohrsThomas M. Rohrs Executive Chairman, Director and Chief ExecutiveOfficer (Principal Executive Officer) March 13, 2018 /s/ Jeffrey AndresonJeffrey Andreson Chief Financial Officer (Principal Accounting andFinancial Officer) March 13, 2018 /s/ John ChenaultJohn Chenault Director March 13, 2018 /s/ Dipanjan DebDipanjan Deb Director March 13, 2018 /s/ Andrew KowalAndrew Kowal Director March 13, 2018 /s/ Iain MacKenzieIain MacKenzie Director March 13, 2018 /s/ Marc Haugen Director March 13, 2018Marc Haugen Exhibit 2.2 STOCK PURCHASE AGREEMENTBY AND AMONGTALON INNOVATIONS CORPORATION,TALON INNOVATIONS HOLDINGS LLC,ICHOR HOLDINGS, LLC,ANDTHE BUYER GUARANTORSDATED AS OF NOVEMBER 3, 2017  TABLE OF CONTENTSPageARTICLE I DEFINITIONS 1 Section 1.1Definitions 1 Section 1.2Other Definitional and Interpretative Provisions 11 ARTICLE II PURCHASE AND SALE 12 Section 2.1Purchase of Shares 12 Section 2.2Payment of Closing Amounts 12 Section 2.3Closing Statement; Post-Closing Adjustments to Purchase Price 13 Section 2.4Closing Transactions 16 Section 2.5Use of Cash 17 Section 2.6Minnesota Investment Fund Payout 17 Section 2.7Tax Withholding 17 ARTICLE III CLOSING DELIVERIES 18 Section 3.1Seller Closing Deliveries 18 Section 3.2Buyer Closing Deliveries 19 ARTICLE IV REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY 20 Section 4.1Organization and Corporate Power; Capitalization 20 Section 4.2Authorization of Transactions 20 Section 4.3Subsidiaries 21 Section 4.4Sufficiency of Assets 21 Section 4.5Absence of Conflicts 21 Section 4.6Financial Statements 21 Section 4.7Absence of Undisclosed Liabilities 22 Section 4.8Absence of Certain Developments 22 Section 4.9Real Property 24 Section 4.10Taxes 25 Section 4.11Contracts and Commitments 26 Section 4.12Government Contracts 28 Section 4.13Proprietary Rights 28 Section 4.14Litigation; Proceedings 30 Section 4.15Brokerage 30 Section 4.16Governmental Licenses and Permits 30 Section 4.17Employees 30 Section 4.18Employee Benefit Plans 31 Section 4.19Insurance 33 Section 4.20Affiliate Transactions 33 Section 4.21Compliance with Laws 34 Section 4.22Powers of Attorney; Guarantees 34 Section 4.23Environmental Compliance 34 i  Section 4.24Customer and Supplier Relationships 35 Section 4.25Inventory 35 Section 4.26International Trade and Anti-Corruption Matters 36 Section 4.27NO ADDITIONAL REPRESENTATIONS AND WARRANTIES 36 ARTICLE V REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE SELLER 37 Section 5.1Shares 37 Section 5.2Authorization of Transactions 37 Section 5.3Absence of Conflicts 37 Section 5.4Brokerage 37 Section 5.5Litigation 37 Section 5.6Governmental Authorities and Consents 38 Section 5.7NO ADDITIONAL REPRESENTATIONS AND WARRANTIES 38 ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER 38 Section 6.1Organization and Corporate Power 38 Section 6.2Authorization of Transaction 38 Section 6.3No Conflicts 39 Section 6.4Governmental Authorities and Consents 39 Section 6.5Litigation 39 Section 6.6Brokerage 39 Section 6.7Financial Ability to Perform; Solvency 40 Section 6.8Investigation by Buyer 41 Section 6.9No Reliance 41 ARTICLE VII CLOSING CONDITIONS; TERMINATION 41 Section 7.1Conditions to Obligations of Buyer 41 Section 7.2Conditions to Obligations of the Company and the Seller 42 Section 7.3Termination 43 ARTICLE VIII COVENANTS PRIOR TO CLOSING 44 Section 8.1Affirmative Covenants 44 Section 8.2Negative Covenants 46 Section 8.3Exclusivity 48 Section 8.4Monthly Financial Statements 48 Section 8.5Antitrust Filings 49 Section 8.6Directors and Officers Indemnification and Insurance 50 Section 8.7R&W Policy 51 Section 8.8280G Cooperation 52 Section 8.9Debt Financing 52 Section 8.10Employment Agreements 54 ARTICLE IX SURVIVAL AND RELATED MATTERS 55 Section 9.1Survival 55 Section 9.2Indemnification 55 Section 9.3Exclusive Remedy 62 ii Section 9.4Escrow Matters 63 ARTICLE X ADDITIONAL AGREEMENTS 63 Section 10.1Tax Matters 63 Section 10.2Certain Employee Matters 66 Section 10.3Press Releases and Announcements 67 Section 10.4Further Transfers 67 Section 10.5Expenses 67 Section 10.6Buyer Guaranty 68 ARTICLE XI MISCELLANEOUS 69 Section 11.1Amendment and Waiver 69 Section 11.2Notices 69 Section 11.3Binding Agreement; Assignment 70 Section 11.4Severability 71 Section 11.5Interpretation; Construction 71 Section 11.6Captions 72 Section 11.7Entire Agreement 72 Section 11.8Counterparts 72 Section 11.9Governing Law 72 Section 11.10Parties in Interest 73 Section 11.11Delivery by Facsimile or Electronic Mail 73 Section 11.12Releases 74 Section 11.13No Third-Party Beneficiaries 74 Section 11.14Specific Performance 75 Section 11.15Legal Representation 75 Section 11.16Incorporation of Appendices, Exhibits and Schedules 76 Section 11.17Debt Financing Source 76 INDEX OF EXHIBITSExhibit AForm of ResignationExhibit BForm of Escrow AgreementiiiSchedule 10.2 72Schedule 3.1(a) 24Schedule 3.1(j) 25Schedule 4.1(a) 24, 26Schedule 4.1(b) 26Schedule 4.1(c) 26Schedule 4.10 31Schedule 4.11 28Schedule 4.11(a) 32Schedule 4.11(b) 33, 34Schedule 4.12 28Schedule 4.13 36Schedule 4.13(a) 34Schedule 4.13(b)(i) 34Schedule 4.13(b)(ii) 34Schedule 4.13(c) 34Schedule 4.13(d) 35Schedule 4.15 36Schedule 4.16 36Schedule 4.17(a) 37Schedule 4.17(b) 37Schedule 4.18(a) 38Schedule 4.18(c) 38Schedule 4.18(d) 38Schedule 4.18(f) 39Schedule 4.19 39Schedule 4.20 39Schedule 4.21 40Schedule 4.23 40Schedule 4.24 41Schedule 4.25 41, 42Schedule 4.3 27Schedule 4.5 27Schedule 4.6(a) 27Schedule 4.7 28Schedule 4.8 28Schedule 4.9(a) 30Schedule 4.9(a)-1 30Schedule 4.9(a)-2 30Schedule 4.9(c) 30Schedule 5.1 43Schedule 5.3 43Schedule 5.6 44Schedule 6.4 45Schedule 7.1(e) 48Schedule 7.1(f) 48Schedule 7.2(d) 49Schedule 8.1 50Schedule 8.2 52Schedule 8.2(c) 52Schedule A 7, 85 INDEX OF SCHEDULES 4  STOCK PURCHASE AGREEMENTTHIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of November 3, 2017, by and amongTalon Innovations Corporation, a Minnesota corporation (the “Company”), Talon Innovations Holdings LLC, a Delaware limitedliability company (the “Seller”), Ichor Holdings, LLC, a Delaware limited liability company (“Buyer”), and the Affiliates of Buyerlisted on Schedule A and which are signatories hereto (each a “Buyer Guarantor” and, all such Buyer Guarantors together with theBuyer, the “Buyer Parties”). The Company, the Seller and Buyer are collectively referred to herein as the “Parties” and individually asa “Party.”WHEREAS, the Company engages in custom machining services, primarily in support of the semiconductorindustry (the “Business”);WHEREAS, the Seller owns one hundred percent (100%) of the issued and outstanding share capital of theCompany; andWHEREAS, Buyer desires to acquire from the Seller, and the Seller desires to sell to Buyer all of the issued andoutstanding share capital (collectively, the “Shares”) of the Company upon the terms and conditions set forth below.NOW, THEREFORE, in consideration of the mutual covenants contained herein and intending to be legallybound and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agreeas follows:ARTICLE I DEFINITIONS1.1DefinitionsFor purposes of this Agreement, the following terms shall have the meanings set forth below:“Accounting Arbitrator” shall have the meaning set forth in Section 2.3(c)(ii).“Accounting Policies and Principles” means GAAP using and applying the same accounting principles, practices,procedures, policies and methods (with consistent classifications, judgments, elections, inclusions, exclusions and valuation andestimation methodologies) used and applied by the Company and its Subsidiaries in the preparation of the Latest Financial Statements.“Acquisition Proposal” means any offer or proposal for, or indication of interest in, a merger, consolidation, stockexchange, business combination, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving theCompany, any direct or indirect acquisition or purchase of all or a substantial portion of the assets of the Company Group, taken as awhole, or all or substantial part of the Company’s equity, other than the transactions contemplated by this Agreement.1“Actions” means any suits, claims, litigations, arbitration proceedings, orders, charges, mediations, complaints,grievances or any investigations, audits by or before any Governmental Authority.“Actual Fraud” of a Party means the knowing and intentional common law fraud by a Person with respect tocontracts as defined under Delaware law.“Actual Indebtedness” shall have the meaning set forth in Section 2.3(b).“Actual Transaction Expenses” shall have the meaning set forth in Section 2.3(b).“Actual Working Capital” shall have the meaning set forth in Section 2.3(b).“Adjusted Purchase Amount” shall have the meaning set forth in Section 2.3(d)(i).“Adjustment Escrow Amount” means an amount equal to Two Million Dollars ($2,000,000).“Affiliate” of any particular Person means any other Person controlling, controlled by or under common controlwith such particular Person, where “control” means the possession, directly or indirectly, of the power to direct the management andpolicies of a Person whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and“controlled” have correlative meanings.“Affiliated Group” means an affiliated group as defined in Section 1504 of the Code (or any similar combined,consolidated or unitary group defined under state, local or foreign income Tax law).“Affordable Care Act” means the Patient Protection and Affordable Care Act, the Health Care and EducationReconciliation Act of 2010, as amended, and, in each case, all regulations and guidance issued thereunder and relating thereto.“Agreement” shall have the meaning set forth in the Preamble.“Anti-Corruption Laws” means all U.S. and non-U.S. Laws relating to the prevention of corruption and bribery,including, without limitation, the U.S. Foreign Corrupt Practices Act of 1977, as amended.“Business” shall have the meaning set forth in the Recitals.“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in SanFrancisco, California are authorized or required by Law to close.“Buyer” shall have the meaning set forth in the Preamble.“Buyer Parties” shall have the meaning set forth in Section 9.2(a).“Cap” shall have the meaning set forth in Section 9.2(a).2“Cash” means the aggregate amount of all unrestricted cash and cash equivalents (including marketable securities,short term investments, liquid instruments, the amount of any received and uncleared checks, wires or drafts, but not including theamount of any issued but uncleared checks, wires or drafts).“Claims” shall have the meaning set forth in Section 11.12.“Closing” shall have the meaning set forth in Section 2.4(a).“Closing Purchase Amount” means an amount in cash equal to (i) the Purchase Price, plus (ii) the EstimatedWorking Capital Excess, if any, minus (iii) the Estimated Working Capital Deficit, if any, minus (iv) the Estimated Indebtedness, ifany, minus (v) the Estimated Transaction Expenses, plus (vi) the Estimated Cash, if any, minus (vii) the Escrow Amount.“Closing Statement” shall have the meaning set forth in Section 2.3(b).“Closing Transactions” shall have the meaning set forth in Section 2.4(b).“COBRA” means Sections 601 et. seq. of ERISA and Section 4980B of the Code.“Code” means the Internal Revenue Code of 1986, as amended from time to time.“Company” shall have the meaning set forth in the Preamble.“Company Group” shall mean the Company and its Subsidiaries.“Company Products” means all product and service offerings of the Company that have since September 4, 2012,been offered for sale, sold, licensed, distributed, or otherwise made available by the Company to third parties in return forconsideration.“Company Proprietary Rights” shall have the meaning set forth in Section 4.13(b).“Contract” means any contract, license, sublicense, mortgage, purchase order, indenture, loan agreement, lease,sublease, agreement or instrument or any binding commitment to enter into any of the foregoing (in each case, whether written or oral)to which the Company is a party or by which any of its assets are bound.“Debt Financing” shall have the meaning set forth in Section 8.9(c).“Debt Financing Source” means the Persons that have committed to provide or have otherwise entered intoagreements in connection with the Debt Financing in connection with the transactions contemplated hereby, and any joinderagreements, indentures or credit agreements entered into pursuant thereto or relating thereto, together with their respective Affiliates,and the respective officers, directors, employees, partners, trustees, shareholders, controlling persons, agents and representatives of theforegoing, and their respective successors and assigns.“Deductible” shall have the meaning set forth in Section 9.2(a).3“Disclosure Schedules” means the disclosure schedules delivered by the Seller to Buyer pursuant to thisAgreement.“Dispute Notice” shall have the meaning set forth in Section 2.3(c)(ii).“Dollar” or “$” means U.S. Dollars.“Employee Benefit Plans” shall have the meaning set forth in Section 4.18(a).“Environmental Law” means any Law or contractual obligation with a Governmental Authority with respect topollution, the protection of the environment or human or worker health and safety, including any Law relating to Hazardous Materials.“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.“ERISA Affiliate” means any corporation or trade or business, whether or not incorporated, that, together with theCompany, is or was, at a relevant time with respect to which an Acquired Company continues to have Liability, treated as a “singleemployer” within the meaning of Section 414 of the Code.“Escrow Account” means the escrow account established by the Escrow Agent to hold the Escrow Amount.“Estimated Accrued Income Taxes” means the estimated accrued and unpaid Income Taxes of, after taking intoaccount any estimated Tax payments made by, the Company Group as of the Closing Date.“Escrow Agent” means SunTrust Bank, a Georgia banking corporation.“Escrow Agreement” means that certain Escrow Agreement in the form attached hereto as Exhibit B.“Escrow Amount” means, collectively, the Indemnification Escrow Amount and the Adjustment Escrow Amount.“Escrow Release Date” shall have the meaning set forth in Section 9.4.“Estimated Cash” shall have the meaning set forth in Section 2.3(a).“Estimated Closing Statement” shall have the meaning set forth in Section 2.3(a).“Estimated Indebtedness” shall have the meaning set forth in Section 2.3(a).“Estimated Transaction Expenses” shall have the meaning set forth in Section 2.3(a).“Estimated Working Capital” shall have the meaning set forth in Section 2.3(a).4“Estimated Working Capital Deficit” means the excess, if any, of (i) Target Working Capital, over (ii) theEstimated Working Capital.“Estimated Working Capital Excess” means the excess, if any, of (i) the Estimated Working Capital, over (ii)Target Working Capital.“Excess Amount” shall have the meaning set forth in Section 2.3(d)(i).“Ex-Im Laws” means all U.S. and non-U.S. Laws relating to export, reexport, transfer, and import controls,including, without limitation, the Export Administration Regulations, the International Traffic in Arms Regulations, and the customsand import Laws administered by U.S. Customs and Border Protection.“Final Cash” shall have the meaning set forth in Section 2.3(c)(i).“Final Indebtedness” shall have the meaning set forth in Section 2.3(c)(i).“Final Transaction Expenses” shall have the meaning set forth in Section 2.3(c)(i).“Final Working Capital” shall have the meaning set forth in Section 2.3(c)(i).“Financial Statements” shall have the meaning set forth in Section 4.6.“Fundamental Representations” shall have the meaning set forth in Section 9.1.“GAAP” means generally accepted accounting principles, consistently applied, in the United States aspromulgated by all relevant accounting authorities.“Government Contract” means any Contract for the sale of supplies or services currently in performance or thathas not been closed that is between the Company and a Governmental Authority or entered into by the Company as a subcontractor atany tier in connection with a Contract between another Person and a Governmental Authority.“Government Official” shall mean any officer or employee of a Governmental Authority or any department,agency or instrumentality thereof, including state-owned entities, or of a public organization or any person acting in an official capacityfor or on behalf of any such government, department, agency, or instrumentality or on behalf of any such public organization.“Governmental Authority” means any nation or government, any state or other political subdivision thereof, anyentity exercising executive, legislative, judicial, regulatory or administration functions of or pertaining to government, including anygovernment authority, agency, department, board, commission or instrumentality of the United States, any foreign government, anyState of the United States or any political subdivision thereof, and any court, tribunal or arbitrator(s) (public or private) of competentjurisdiction.“Hazardous Materials” means any material, waste or substance (i) for which Liability or standards of conduct maybe imposed under any Environmental Law, (ii) that is defined, determined, or identified as hazardous or toxic under, or regulated by,any Environmental5Law, or (iii) the release of which is prohibited or restricted under any Environmental Law, including petroleum and petroleum productsand byproducts, polychlorinated biphenyls, asbestos, lead, radiation and toxic mold.“HSR Act” shall have the meaning set forth in Section 6.4.“Income Tax” “Income Tax” means any Tax (i) based upon, measured by, or calculated with respect to, netincome or net receipts, proceeds or profits, or (ii) based upon, measured by, or calculated with respect to multiple bases (including anycorporate, franchise and occupation Tax) if such Tax is primarily based upon, measured by, or calculated with respect to, one or morebases described in clause (i) of this definition.“Indebtedness” means, without duplication, (i) any obligation for borrowed money, in respect of loans oradvances, or issued in substitution for or exchange of indebtedness for borrowed money, (ii) any indebtedness evidenced by any note,bond, debenture or other similar instrument (including any seller notes, deferred purchase price obligations, contingent paymentobligations, conditional sale obligations, earnout obligations or similar obligations issued or entered into in connection with anacquisition, but excluding customary consulting, deferred compensation, and indemnification obligations or similar arrangements thatare not incurred in connection with indebtedness for borrowed money), (iii) any indebtedness for the deferred purchase price ofproperty or services and conditional sale obligations (other than trade accounts payable) with respect to which a Person is liable,contingently or otherwise, as obligor or otherwise, (iv) all obligations in respect of letters of credit, to the extent drawn, and bankers’acceptances issued for the account of a Person, (v) any Liabilities under leases required under GAAP to be capitalized for which aPerson is liable, contingently or otherwise, as obligor, guarantor or otherwise, (vi) all interest rate protection agreements (valued on amarket quotation basis), (vii) all outstanding checks that will ultimately be funded through a Person’s line of credit or other borrowedmoney, and (viii) any Estimated Accrued Income Taxes payable by the Company as of the Closing, calculated in accordance with theAccounting Policies and Principles, (ix) any accrued and unpaid interest on, and any prepayment premiums, penalties or similarcontractual charges in respect of, any of the foregoing obligations computed as though payment is being made in respect thereof on theClosing Date, and (x) all guarantees of such Person in connection with any of the foregoing. Notwithstanding anything to the contrarycontained herein, “Indebtedness” shall not include (x) any amounts included in Transaction Expenses (i.e., there shall be no duplicationof any amounts as Indebtedness and Transaction Expenses) or (y) any amounts that are reflected in the Working Capital as a currentliability.“Indemnification Escrow Amount” means an amount equal to Nine Hundred Seventy Five Thousand Dollars($975,000).“Indemnified Party” shall have the meaning set forth in Section 9.2(c)(i).“Indemnifying Party” shall have the meaning set forth in Section 9.2(c)(i).“Insiders” shall have the meaning set forth in Section 4.20.“IT Systems” shall have the meaning set forth in Section 4.13(e).6“Item of Dispute” shall have the meaning set forth in Section 2.3(c)(ii).“Knowledge” as used in the phrases “to the Knowledge of the Seller,” “to the Seller’s Knowledge,” “to theKnowledge of the Company,” “to the Company’s Knowledge” or phrases of similar import means the actual knowledge of GregOlson, Jason Prescott, Marty Dertinger and Michelle Squire.“Latest Balance Sheet” shall have the meaning set forth in Section 4.6.“Latest Financial Statements” shall have the meaning set forth in Section 4.6.“Law” means any applicable federal, state, local or foreign law (including common law), constitution, statute, rule,regulation, ordinance, Permit, order, writ, award (including the award of any arbitrator to the extent enforceable by any GovernmentalAuthority), injunction, judgment, determination or decree of any Governmental Authority.“Leased Real Property” means all leasehold or subleasehold estates and other rights to use or occupy any land,buildings, structures, improvements, fixtures or other interest in real property held by the Company.“Leases” means all leases, subleases, licenses, concessions and other agreements (written or oral) pursuant towhich the Company holds any Leased Real Property, including the right to all security deposits and other amounts and instrumentsdeposited by or on behalf of the Company thereunder.“Liability” means any liability, debt, obligation, deficiency, Tax, penalty, assessment, fine, claim, cause of actionor other liability of any kind or nature whatsoever, whether asserted or unasserted, absolute or contingent, known or unknown, accruedor unaccrued, liquidated or unliquidated, and whether due or to become due and regardless of when asserted.“Licenses” shall have the meaning set forth in Section 4.16.“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including, withoutlimitation, any conditional sale or other title retention agreement or lease in the nature thereof) or any agreement to file any of theforegoing, and any filing or agreement to file a financing statement as debtor under the Uniform Commercial Code or any similarstatute.“Loss” shall have the meaning set forth in Section 9.2(a).“Losses” shall have the meaning set forth in Section 9.2(a).“Management Agreements” shall have the meaning set forth in Section 8.10.“Material Adverse Effect” means any event, circumstance, state of facts, change or development that has had, orwould reasonably be expected to have, a material and adverse effect, change or development upon the business, results of operations,or financial condition of the Company Group taken as a whole; provided, however, that any adverse effect arising from or7related to: (a) conditions generally affecting the United States economy or generally affecting one or more industries in which theCompany or any of its Subsidiaries operate; (b) national or international political or social conditions, including terrorism or theengagement by the United States in hostilities or acts of war; (c) financial, banking, or securities markets (including any disruptionthereof) and any decline in the price of any security or any market index); (d) changes in GAAP or other accounting standards, in eachcase, after the date hereof; (e) changes in any Laws after the date hereof; (f) any action taken by a party hereto expressly required bythis Agreement or any other Transaction Document; (g) the public announcement, pendency or completion of the transactionscontemplated by this Agreement; or (h) any failure, in and of itself, by the Company or any of its Subsidiaries to meet any internal ordisseminated projections, forecasts or revenue or earnings predictions for any period (it being understood that the facts andcircumstances giving rise or contributing to such failure may be taken into account in determining whether there has been a MaterialAdverse Effect), shall not be taken into account in determining whether a “Material Adverse Effect” has occurred, except, in respect ofclauses (a) thorough (e) above, to the extent that such event, occurrence, fact, condition or change has or had a disproportionate effecton the Company Group compared to other participants in the industry in which the Company Group conducts the Business.“Material Customer” shall have the meaning set forth in Section 4.24.“Material Supplier” shall have the meaning set forth in Section 4.24.“Mini-Basket” shall have the meaning set forth in Section 9.2(a).“Minnesota Investment Fund Payment” means the amount payable to the Company pursuant to Loan Agreement,dated as of July 15, 2016, by and between the Sauk Rapids Housing and Redevelopment Authority, as lender, and Talon InnovationsCorporation, as borrower.“Objection Notice” shall have the meaning set forth in Section 9.2(c)(i).“Ordinary Course of Business” means ordinary course of business consistent with past custom and practice(including with respect to quantity and frequency).“Owned Proprietary Rights” means all Proprietary Rights owned or purported to be owned by the Company.“Parties” shall have the meaning set forth in the Preamble.“Party” shall have the meaning set forth in the Preamble.“Permit” means any permit, license, certificate, franchise, permission, variance, clearance, registration,qualification or authorization or approval issued, granted, given or otherwise made available by or under the authority of anyGovernmental Authority or pursuant to any Law.“Person” means an individual, a partnership, a limited liability company, a corporation, a cooperative, anassociation, a joint stock company, a trust, a joint venture, an8unincorporated organization and a governmental authority, body or entity or any department, agency or political subdivision thereof.“Pre-Closing Tax Contest” has the meaning set forth in Section 10.1(e).“Pre-Closing Tax Period” shall have the meaning set forth in Section 10.1(a).“Proprietary Rights” means all registered and unregistered intellectual property rights throughout the world,including all of the following items along with all income, royalties, damages, equitable relief and payments due or payable prior to orat the Closing or thereafter (including damages, equitable relief and payments for past, present or future infringements,misappropriations, dilutions, or misuse thereof, the right to sue and recover for past infringements, misappropriations, dilutions ormisuse thereof and any and all corresponding rights that, now or hereafter, may be secured throughout the world): (i) patents, patentapplications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice) and any reissue,continuation, continuation-in-part, division, revision, extension or reexamination thereof; (ii) trademarks, service marks, industrialdesigns, trade dress, Internet domain names and web sites, logos, topographies, trade names and corporate names, and other indicia ofsource, together with all goodwill associated therewith; (iii) copyrights, copyrightable works and mask works; (iv) all registrations,applications and renewals for any of the foregoing; (v) trade secrets and confidential information (including ideas, formulae,compositions, know-how, manufacturing and production processes and techniques, research and development information, drawings,specifications, designs, plans, proposals, technical data, financial, business and marketing plans, and customer and supplier lists andrelated information); and (vi) computer software and software systems (including data, source code and object code, databases andrelated documentation).“Purchase Price” means One Hundred Thirty Million Dollars ($130,000,000).“R&W Policy” means that certain representation and warranty insurance policy to be issued by XL CatlinMergers and Acquisitions Group in favor of the Buyer with a policy limit to be not less than $13,000,000.“R&W Policy Expenses” means the costs of the R&W Policy, including the premium therefor and underwritingfees, commissions, and Taxes payable in respect thereof.“Released Parties” shall have the meaning set forth in Section 11.12.“Reviewed Financial Statements” shall have the meaning set forth in Section 4.6.“Sanctioned Country” means any country or region that is, or has been in the last five years, the subject or targetof a comprehensive embargo under Sanctions Laws (including, without limitation, Cuba, Iran, North Korea, Sudan, Syria, and theCrimea region of Ukraine).“Sanctioned Person” means any individual or entity that is the subject or target of sanctions or restrictions underSanctions Laws or Ex-Im Laws, including: (i) any individual or entity listed on any applicable U.S. or non-U.S. sanctions- or export-related restricted party list, including, without limitation, the U.S. Department of the Treasury Office of Foreign Assets Control’s(“OFAC”) Specially Designated Nationals and Blocked Persons List; (ii) any entity that9is, in the aggregate, 50 percent or greater owned, directly or indirectly, or otherwise controlled by a person or persons described inclause (i); or (iii) any national of a Sanctioned Country.“Sanctions Laws” means all U.S. and non-U.S. Laws relating to economic or trade sanctions, including, withoutlimitation, the Laws administered or enforced by the United States (including by OFAC or the U.S. Department of State), and theUnited Nations Security Council.“Seller” shall have the meaning set forth in the Preamble.“Seller Parties” shall have the meaning set forth in Section 9.2(b).“Shares” shall have the meaning set forth in the Recitals.“Shortfall Amount” shall have the meaning set forth in Section 2.3(d)(i).“Straddle Period” shall have the meaning set forth in Section 10.1(d).“Subsidiary” means, with respect to any Person, any entity of which securities or other ownership interests havingordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directlyor indirectly owned by such Person.“Target Working Capital” means an amount equal to Fifteen Million One Hundred Forty Three Thousand EightHundred Sixty One Dollars ($15,143,861).“Tax” or “Taxes” means any federal, state, local or foreign income, gross receipts, capital gains, franchise,alternative or add-on minimum, estimated, sales, use, goods and services, transfer, registration, value added, excise, natural resources,severance, stamp, occupation, premium, windfall profit, environmental, customs, duties, real property, personal property, escheat,capital stock, social security, unemployment, employment, disability, payroll, license, employee or other withholding, contributions orother tax, of any kind whatsoever, including any interest, penalties or additions to tax or additional amounts in respect of the foregoing,whether disputed or not.“Tax Representations” shall have the meaning set forth in Section 9.1.“Tax Returns” means returns, declarations, reports, claims for refund, information returns or other documents(including any related or supporting schedules, statements or information) filed or required to be filed in connection with thedetermination, assessment or collection of Taxes of any party or the administration of any laws, regulations or administrativerequirements relating to any Taxes.“Transaction Documents” means this Agreement, the Escrow Agreement, and any other agreement entered intopursuant hereto to which the Seller and/or the Company is a party; provided that in no event shall any employment agreement,transaction bonus agreement or similar agreement entered into with any employee of the Company or any agreement or documentexecuted to consummate the Debt Financing constitute a Transaction Document hereunder.10“Transaction Expenses” means the aggregate amount of unpaid fees, commissions or expenses that have beenincurred on or prior to the Closing on behalf of the Company, the Seller or any of their respective Affiliates, for which the CompanyGroup is liable or for which the Buyer or any of its Affiliates is liable on behalf of the Seller or Company Group as a result of thetransactions contemplated by this Agreement or the Transaction Documents, in connection with the preparation, negotiation andexecution of this Agreement and/or the consummation or performance of any of the transactions contemplated by this Agreement andthe other Transaction Documents or relating to bonuses, wages, vacation accruals, severance and any other outstanding liabilities to theindependent contractors and employees of the Company payable as a result of or in connection with the transactions contemplatedhereby, and any expenses borne or to be borne by the Company as a result of the consummation transactions contemplated hereby orpayments made in respect of any equity incentives or similar arrangements (and, in each case, the employer portion of any payroll,social security, unemployment or similar Tax incurred in connection therewith (without duplication of any Taxes taken into account asIndebtedness)), and any other (i) fees and expenses of any broker, investment banker or financial advisor, (ii) fees and expenses ofcounsel, advisors, consultants, investment bankers, accountants, auditors and experts, (iii) severance, stay, retention, sale, change ofcontrol or similar payment made or required to be made with respect to any current or former director, officer, employee, contractor,consultant or agent as a result of, or in connection with, this Agreement and the transactions contemplated by this Agreement and theemployer portion of payroll, social security, unemployment or similar Taxes relating thereto, (iv) the pro rata portion (based on thenumber of days of the year elapsed through the Closing Date) of bonuses payable by the Company with respect to the fiscal yearending December 31, 2017, and any Taxes payable by the Company in connection therewith (including the employer portion of anypayroll, social security, unemployment or similar Tax imposed on such amounts), solely to the extent not paid prior to the Closing ornot accrued for and included in the calculation of Working Capital. Notwithstanding anything to the contrary contained herein,“Transaction Expenses” shall not include (A) any amounts included in Indebtedness (i.e., there shall be no duplication of any amountsas Indebtedness and Transaction Expenses), (B) any amounts that are reflected in the Working Capital as a current liability or(C) expenses incurred by the Company Group pursuant to Section 8.9.“WARN Act” means the Worker Adjustment Retraining and Notification Act of 1988 any or similar state or localLaw;“Working Capital” means the Company’s current assets (excluding cash and Tax assets) less current liabilities(excluding Tax liabilities, Indebtedness and Transaction Expenses), each calculated in accordance with the Accounting Policies andPrinciples, consistently applied.1.2Other Definitional and Interpretative Provisions(a)The words “hereof,” “herein” and “hereunder” and words of like import used in this Agreement shallrefer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are includedfor convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles,Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement unless otherwisespecified. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of thisAgreement as if set11forth in full herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have themeaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and anyplural term the singular. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall bedeemed to be followed by the words “without limitation,” whether or not they are in fact followed by those words or wordsof like import. “Writing,” “written” and comparable terms refer to printing, typing and other means of reproducing words(including electronic media) in a visible form. References to any agreement or contract are to that agreement or contract asamended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to anyPerson include the successors and permitted assigns of that Person. References from or through any date mean, unlessotherwise specified, from and including or through and including, respectively. References to “law” or “laws” shall bedeemed also to include any and all Laws. References to “Dollars” and “$” mean U.S. dollars. Whenever this Agreementrefers to a number of days, such shall refer to calendar days, unless such reference is specifically to “Business Days.”ARTICLE II PURCHASE AND SALE2.1Purchase of SharesAt the Closing and subject to the terms and conditions of this Agreement, Buyer shall purchase, and the Sellershall sell, convey, assign, transfer and deliver, free and clear of all Liens (other than transfer restrictions under applicable securitiesLaws), to Buyer, the Shares (the “Purchase”).2.2Payment of Closing AmountsOn the Closing Date, Buyer shall pay, repay or deliver, as applicable:(a)the Closing Purchase Amount (by wire transfer in immediately available funds) to the Seller.(b)all Indebtedness of the Company outstanding as of immediately prior to the Closing and set forth on theIndebtedness Payoff Schedule delivered at Closing and attached hereto. In order to facilitate such repayment, prior to theClosing, the Seller shall cause the Company to obtain and deliver to Buyer payoff letters for all such Indebtedness, whichpayoff letters shall be in form and substance reasonably acceptable to Buyer and shall indicate that the lenders of suchIndebtedness have agreed to release all Liens in respect of such Indebtedness relating to the assets and properties of theCompany upon receipt of the amounts indicated in such payoff letters (the “Payoff Letters”).(c)the Company’s Transaction Expenses set forth on the Company Transaction Expenses PaymentSchedule delivered at Closing and attached hereto, on behalf of the Company, the Seller or their respective Affiliates, asapplicable, to the extent unpaid as of immediately prior to the Closing. In order to facilitate such payment, prior to theClosing,12the Seller shall cause the Company to obtain and deliver to Buyer invoices with respect to each such Transaction Expensesthat is to be paid by Buyer pursuant to this Section 2.2(c).(d)the Escrow Amount to the Escrow Agent.2.3Closing Statement; Post-Closing Adjustments to Purchase Price(a)Determination of Closing Adjustment. No later than three (3) Business Days prior to the Closing, theCompany shall provide Buyer with a written statement certified by an executive officer of the Company (the “EstimatedClosing Statement”) of its good faith estimate of Working Capital as of the close of business on the day prior to the ClosingDate (“Estimated Working Capital”), its good faith estimate of the aggregate amount of all Cash of the Company as of theclose of business on the day prior to the Closing Date (“Estimated Cash”), its good faith estimate of the aggregate amount ofall Indebtedness of the Company as of immediately prior to the Closing (“Estimated Indebtedness”), its good faith estimateof the aggregate amount of all Transaction Expenses that will be unpaid as of immediately prior to the Closing (“EstimatedTransaction Expenses”), and the amount, if any, by which the Purchase Price is to be adjusted as a result thereof. TheCompany shall reasonably consult with Buyer prior to delivery of the Estimated Closing Statement; provided, that in noevent shall such consultation or the delivery of such Estimated Closing Statement be deemed to constitute the agreement ofBuyer to any of the estimates or amounts set forth in such Estimated Closing Statement, and in no way shall delivery of theEstimated Closing Statement or the consummation of the Closing be construed as a waiver by Buyer of its rights under thisSection 2.3. In connection with the preparation of the Estimated Closing Statement, the Seller shall consult in good faithwith Buyer regarding the amounts and calculations therein, and provide Buyer with reasonable supporting documentationfor the calculations included therein, and make the financial records of the Company Group reasonably available to Buyer inconnection therewith and consider in its sole discretion any comments or modifications from Buyer; provided that theEstimated Working Capital, Estimated Cash, Estimated Indebtedness and Estimated Transaction Expenses set forth in theEstimated Closing Statement (i)will be prepared in accordance with the definitions thereof and, in the case of EstimatedWorking Capital, Estimated Cash and Estimated Indebtedness, consistently with the Accounting Policies and Principles, and(ii) will disregard any and all effects on the assets and Liabilities of the Company as a result of the transactions contemplatedby this Agreement (including any financing arrangements entered into by Buyer or any of its Affiliates in connectiontherewith or any purchase accounting or other similar adjustments).(b)Determination of Post-Closing Adjustment. No later than ninety (90) days following the Closing,Buyer shall deliver to the Seller a written statement certified by an executive officer of Buyer (the “Closing Statement”)setting forth the calculation of the actual Working Capital as of the close of business on the day prior to the Closing Date(“Actual Working Capital”), a calculation of the actual Cash of the Company as of the close of business on the day prior tothe Closing Date (“Actual Cash”), a calculation of the actual Indebtedness of the Company as of immediately prior to theClosing (“Actual Indebtedness”), a calculation of the actual Transaction Expenses as of the Closing (“Actual TransactionExpenses”). The Actual Working Capital, Actual Cash, Actual Indebtedness13and Actual Transaction Expenses set forth in the Closing Statement (i) will be prepared in accordance with the definitionsthereof and, in the case of Actual Working Capital, Actual Cash and Actual Indebtedness, consistently with the AccountingPolicies and Principles, and (ii) will disregard any and all effects on the assets and Liabilities of the Company as a result ofthe transactions contemplated by this Agreement (including any financing arrangements entered into by Buyer or any of itsAffiliates in connection therewith or any purchase accounting or other similar adjustments). If the Closing Statement is notdelivered within ninety (90) days following the Closing, the Estimated Cash, the Estimated Indebtedness and the EstimatedTransaction Expenses will be deemed the Final Cash, Final Indebtedness, and Final Transaction Expenses, respectively,absent manifest error.(c)Disputed Final Adjustment.(i)No later than thirty (30) days following the delivery by Buyer of the Closing Statement, theSeller shall notify Buyer in writing whether it accepts or disputes the accuracy of the calculation of ActualWorking Capital, Actual Cash, Actual Indebtedness and Actual Transaction Expenses. During such thirty (30)day period, the Seller and its agents shall be provided with such access to the financial books and records of theCompany as well as any relevant work papers of the Company Group as the Seller may reasonably request toenable it to evaluate the calculations of Actual Working Capital, Actual Cash, Actual Indebtedness and ActualTransaction Expenses prepared by Buyer. If the Seller accepts the calculation of Actual Working Capital, ActualCash, Actual Indebtedness and Actual Transaction Expenses determined pursuant to Section 2.3(b), or if theSeller fails within such thirty (30) day period to notify Buyer of any dispute with respect thereto, then thecalculation of Actual Working Capital determined pursuant to Section 2.3(b) shall be the “Final Working Capital,”the calculation of Actual Cash determined pursuant to Section 2.3(b) shall be the “Final Cash,” the calculation ofActual Indebtedness determined pursuant to Section 2.3(b) shall be the “Final Indebtedness,” and the calculationof Actual Transaction Expenses determined pursuant to Section 2.3(b) shall be the “Final Transaction Expenses,”which, in each case, shall be deemed final and conclusive and binding upon all Parties in all respects.(ii)If the Seller disputes the accuracy of the calculation of Actual Working Capital, Actual Cash,Actual Indebtedness or Actual Transaction Expenses, the Seller shall provide written notice to Buyer no later thanthirty (30) days following the delivery by Buyer to the Seller of the calculation of Actual Working Capital, ActualCash, Actual Indebtedness and Actual Transaction Expenses (the “Dispute Notice”), setting forth in reasonabledetail those items that the Seller disputes (each such item, an “Item of Dispute”). During the thirty (30) day periodfollowing delivery of the Dispute Notice, Buyer and the Seller shall negotiate in good faith with a view toresolving their disagreements over each Item of Dispute. During such thirty (30) day period and until the finaldetermination of Actual Working Capital, Actual Cash, Actual Indebtedness and/or Actual Transaction Expensesin accordance with this Section 2.3(c)(ii) or Section 2.3(c)(iii), as the case may be (as so determined, or asdetermined pursuant to14Section 2.3(c)(i) above, “Final Working Capital,” “Final Cash,” “Final Indebtedness,” and “Final TransactionExpenses,” respectively), the Seller and its agents shall be provided with such access to the financial books andrecords of the Company Group, as well as any relevant work papers of the Company, during normal businesshours and without interruption to the Business, as the Seller may reasonably request to enable it to address allmatters set forth in any Dispute Notice. If the Parties resolve their differences over the disputed items inaccordance with the foregoing procedure, Final Working Capital, Final Cash, Final Indebtedness and/or FinalTransaction Expenses shall be the amounts agreed upon by them. If the Parties fail to resolve their differencesover the disputed items within such thirty (30) day period, then Buyer and the Seller shall forthwith jointly select amutually agreeable, nationally or regionally recognized accounting firm (the “Accounting Arbitrator”) to make abinding determination as to the disputed items in accordance with this Agreement.(iii)The Accounting Arbitrator will under the terms of its engagement have no more than thirty(30) days from the date of referral and no more than ten (10) Business Days from the final submission of writteninformation and written testimony by Buyer and the Seller (which will be provided to each other) within which torender its written decision with respect to each Item of Dispute (and only with respect to any unresolved Items ofDispute set forth in the Dispute Notice) and the final calculation of Actual Working Capital, Actual Cash, ActualIndebtedness and/or Actual Transaction Expenses shall be based solely on the resolution of such Items of Disputein accordance with the Accounting Policies and Principles. The Accounting Arbitrator shall review such writtensubmissions, and base its determination solely on such submissions and in accordance with this Agreement;provided, that in resolving any disputed item, the Accounting Arbitrator may not assign a value to any item greaterthan the maximum value or less than the minimum value for each such item claimed by the Seller in the EstimatedWorking Capital, Estimated Cash, Estimated Indebtedness or Estimated Transaction Expenses or by Buyer in theActual Working Capital, Actual Cash, Actual Indebtedness or Actual Transaction Expenses, as applicable. Thedecision of the Accounting Arbitrator shall be deemed final and binding upon the Parties and enforceable by anycourt of competent jurisdiction and the Accounting Arbitrator’s final calculation of Actual Working Capital shallbe deemed the “Final Working Capital,” the Accounting Arbitrator’s final calculation of Actual Cash shall bedeemed the “Final Cash,” the Accounting Arbitrator’s final calculation of Actual Indebtedness shall be deemedthe “Final Indebtedness,” and/or the Accounting Arbitrator’s final calculation of Actual Transaction Expensesshall be deemed the “Final Transaction Expenses.” The fees and expenses of the Accounting Arbitrator shall beallocated to be paid by Buyer, on the one hand, and the Seller, on the other, based upon the percentage that theportion of the contested amount not awarded to each Party bears to the amount actually contested by such Party,as determined by the Accounting Arbitrator.(d)Payment following Calculation of Final Working Capital, Final Cash, Final Indebtedness and FinalTransaction Expenses.15(i)Following the determination of Final Working Capital, Final Cash, Final Indebtedness andFinal Transaction Expenses, the Closing Purchase Amount shall be recalculated by substituting the Final WorkingCapital for the Estimated Working Capital in Section 2.3(a), the Final Cash for the Estimated Cash in Section2.3(a), the Final Indebtedness for the Estimated Indebtedness in Section 2.3(a), and the Final TransactionExpenses for the Estimated Transaction Expenses in Section 2.3(a) (the “Adjusted Purchase Amount”) and if (A)the Adjusted Purchase Amount is greater than the Closing Purchase Amount (such excess amount, if any, the“Excess Amount”), then (I) Buyer and the Seller shall within three (3) Business Days cause the Escrow Agent torelease to the Seller the Adjustment Escrow Amount and (II) Buyer shall within three (3) Business Days pay tothe Seller the Excess Amount; (B) the Closing Purchase Amount is greater than the Adjusted Purchase Amount(such shortfall amount, if any, the “Shortfall Amount”), then within three (3) Business Days Buyer and the Sellershall cause the Escrow Agent to release to Buyer an aggregate amount equal to the Shortfall Amount from theAdjustment Escrow Amount (with any Shortfall Amount that exceeds the Adjustment Escrow Amount to comefrom the Indemnification Escrow Amount, or if the Indemnification Escrow Amount has been released orexhausted, from the Seller directly); provided that if the Shortfall Amount is less than the Adjustment EscrowAmount, then within three (3) Business Days Buyer and the Seller shall cause the Escrow Agent to release to theSeller the remaining amount of the Adjustment Escrow Amount; and (C) the Closing Purchase Amount is equal tothe Adjusted Purchase Amount, then neither party shall make any payment pursuant to this Section 2.3(d) andwithin three (3) Business Days Buyer and the Seller shall cause the Escrow Agent to release to the Seller theAdjustment Escrow Amount.(ii)All payments pursuant to this Section 2.3(d) shall be made by wire transfer of immediatelyavailable funds to an account designated in advance by the Seller or Buyer, as applicable, and shall be made on orprior to the fifth (5th) Business Day following: (A) the thirty (30)-day period following Buyer’s delivery of thecalculation of the Actual Working Capital, Actual Cash, Actual Indebtedness and Actual Transaction Expensespursuant to Section 2.3(b) if the Seller does not timely dispute any of such amounts pursuant to Section 2.3(c)(i);(B) the date of the Seller’s and Buyer’s mutual determination of Final Working Capital, Final Cash, FinalIndebtedness and Final Transaction Expenses in the event the Seller timely disputes either of such amountspursuant to Section 2.3(c)(i) and the Seller’s and Buyer’s differences are resolved without the engagement of anAccounting Arbitrator pursuant to Section 2.3(c)(ii); and (C) the date of the Accounting Arbitrator’s determinationof Final Working Capital, Final Cash, Final Indebtedness and/or Final Transaction Expenses pursuant to Section2.3(c)(iii) in the event the Seller timely disputes either of such amounts pursuant to Section 2.3(c)(i) and the Sellerand Buyer are unable to resolve their differences pursuant to Section 2.3(c)(ii).2.4Closing Transactions16(a)Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall takeplace at the offices of Kirkland & Ellis LLP at 555 California Street, Suite 2700, San Francisco, California, 94104, on thesecond Business Day following the satisfaction (or waiver by the party entitled to the benefit thereof) of the conditions to theClosing set forth in Section 7.1 and Section 7.2 (other than the conditions that must be satisfied (or waived by the partyentitled to the benefit thereof) at the Closing, but subject to the satisfaction or waiver of such conditions at the Closing). Thedate upon which the Closing occurs shall be referred to as the “Closing Date.” The Closing shall be deemed to be effectiveas 12:01 a.m. on the Closing Date. All proceedings to be taken and all documents to be executed and delivered by allParties at the Closing will be deemed to have been taken and executed simultaneously and no proceedings will be deemed tohave been taken nor documents executed or delivered until all have been taken, executed and delivered.(b)Closing Transactions. On the Closing Date, the Parties shall consummate the following “ClosingTransactions”:(i)The Seller shall deliver to Buyer the Shares;(ii)Buyer shall deliver to the Seller the consideration specified in Section 2.2(a) in exchange forthe transfer to Buyer of the Shares; and(iii)The Parties and their respective Affiliates shall deliver the certificates and other documentsand instruments required to be delivered by or on behalf of such Party under Article III.2.5Use of CashThe Parties hereby agree that, notwithstanding anything to the contrary herein: (A) the Seller may cause theCompany Group to use Cash to pay, on or prior to the Closing, all Indebtedness and/or Transaction Expenses; and (B) the Subsidiariesof the Company may make cash advances, cash dividend payments or other cash distributions to the Company and/or its otherSubsidiaries for purposes of the Company’s or any of its Subsidiaries’ paying, on or prior to the Closing, such Indebtedness and/orTransaction Expenses.2.6Minnesota Investment Fund PayoutWithin ten (10) Business Days following receipt by the Company Group of the Minnesota Investment FundPayment, Buyer shall pay (or cause the Company to pay) to the Seller the amount of the Minnesota Investment Fund Payment. If all orany portion of the Minnesota Investment Fund Payment is required by the State of Minnesota to be returned (other than due to a breachof the terms thereof by Buyer or the Company Group), then, within ten (10) business days of receipt by the Seller of documentationfrom the State of Minnesota confirming such requirement, the Seller shall pay to Buyer or its designee such returned amount.2.7Tax Withholding17Notwithstanding anything in this Agreement to the contrary, Buyer and the Company shall be entitled to deductand withhold from the amounts paid hereunder as Buyer or the Company, as applicable, is required to deduct and withhold withrespect to the making of such payment under the Code or any applicable provision of state, local or foreign Tax law; provided,however, that Buyer (or its designee) shall use commercially reasonable efforts to give the Seller three (3) days advance written noticeprior to any such withholding to permit the Seller to take any reasonably available steps to eliminate or minimize such withholding andBuyer (or its designee) shall cooperate in good faith with any reasonable request of the Seller to eliminate or minimize suchwithholding. Any amounts deducted and withheld pursuant to this Section 2.7 shall be timely paid over to the proper GovernmentalAuthority. To the extent that amounts are so deducted or withheld by Buyer or the Company and paid over to the properGovernmental Authority, such deducted or withheld amounts shall be treated for all purposes of this Agreement as having been paid tothe Person in respect of which such deduction and withholding was made.ARTICLE III CLOSING DELIVERIES3.1Seller Closing DeliveriesOn the Closing Date, the Seller and the Company shall deliver, or caused to be delivered, to Buyer, each of thefollowing:(a)copies of all third party, governmental and regulatory approvals, authorizations, filings, releases,waivers, terminations or other consents required in connection with the consummation of the transactions contemplated bythis Agreement and the other Transaction Documents that are set forth on Schedule 3.1(a);(b)certified copies of the certificate of incorporation and bylaws of the Company and the resolutions of itsboard of directors and the Seller’s board of managers authorizing the execution, delivery and performance of this Agreementand the other Transaction Documents to which the Company or the Seller, as applicable, are a party, as applicable, andapproving the consummation of the transactions contemplated hereby and thereby;(c)a certified copy of the resolution of the Company’s board of directors terminating the Company’s401(k) plan no later than the day prior to the Closing Date, contingent on the occurrence of the Closing;(d)certificates of the secretary of state of the State of Minnesota and each jurisdiction where the Companyis qualified to do business (including, without limitation, the states listed on Schedule 4.1(a)) stating that the Company is ingood standing;(e)a non-foreign affidavit from the Seller dated as of the Closing Date, sworn under penalty of perjury andin form and substance required under the Treasury Regulations issued pursuant to Code §1445 certifying that the Seller isnot a “Foreign Person” as defined in Code §1445;18(f)the Escrow Agreement, duly executed by each of the Seller and the Escrow Agent;(g)the Payoff Letters;(h)written resignations in the form attached as Exhibit A from each director of the Company Group,effective at or prior to the Closing;(i)all other documents, instruments and certificates specifically required by this Agreement to be deliveredby the Company and/or the Seller at the Closing;(j)evidence, in form and substance reasonably satisfactory to Buyer, of the termination of the Contracts setforth on Schedule 3.1(j);(k)a certificate to the effect that each of the conditions specified in Section 7.1(a) and Section 7.1(b) havebeen satisfied; and(l)such other documents, instruments or certificates as Buyer may reasonably request to effect thetransactions contemplated hereby.3.2Buyer Closing DeliveriesBuyer shall deliver, or shall cause to be delivered, to the Seller, as applicable:(a)evidence of the wire transfers referred to in Section 2.2(a) (as promptly as reasonably practicablefollowing the availability thereof after the Closing)(b)the Escrow Agreement, duly executed by Buyer and the Escrow Agent;(c)certified copies of the resolutions of Buyer’s board of managers authorizing the execution, delivery andperformance of this Agreement and the other Transaction Documents and approving the consummation of the transactionscontemplated hereby and thereby;(d)a certificate to the effect that each of the conditions specified in Section 7.2(a) has been satisfied;(e)the resolutions of Buyer’s board of managers authorizing the execution, delivery and performance ofthis Agreement and the other Transaction Documents to which it is a party, and approving the consummation of thetransactions contemplated hereby and thereby;(f)certificates of the secretary of state of the State of Delaware stating that the Buyer is in good standing;and(g)such other documents, instruments or certificates as the Seller may reasonably request to effect thetransactions contemplated hereby.19ARTICLE IV REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANYAs a material inducement to Buyer to enter into and perform its obligations under this Agreement, the Seller andthe Company hereby represent and warrant to Buyer, jointly and severally, as of the date hereof and as of the Closing, that:4.1Organization and Corporate Power; Capitalization(a)The Company is a corporation duly organized, validly existing and in good standing under the laws ofthe State of Minnesota. Each Subsidiary of the Company is duly organized, validly existing and in good standing (injurisdictions where the concept of “good standing” is applicable) in the jurisdiction in which such member is organized. TheCompany Group is qualified to do business in every jurisdiction in which such qualification is necessary, except where thefailure to so qualify has not had or would not reasonably be expected to have a Material Adverse Effect. All jurisdictions inwhich the Company or its Subsidiaries is qualified to do business are set forth on Schedule 4.1(a). The Company Group hasfull corporate power and authority. The Company has delivered to Buyer correct and complete copies of its certificate ofincorporation and bylaws (each as amended to date) or other Governing Documents for each member of the CompanyGroup. No member of the Company Group is in default under or in violation of any provision of its certificate ofincorporation or bylaws (or similar governing documents). The Company Group does not own or have any right to acquire,directly or indirectly, any outstanding capital stock of, partnership interest, joint venture interest, equity participation or othersecurity or interest in, any other Person.(b)The authorized and issued and outstanding shares of capital stock of the Company, including thebeneficial ownership with respect to such stock, is as set forth on Schedule 4.1(b). All issued and outstanding shares ofcapital stock of the Company have been duly authorized and are validly issued, fully paid and non-assessable. There are nooutstanding options, warrants, rights to subscribe to, or securities or rights convertible into, units or shares or evidencingownership of the Company capital stock or contracts, commitments, understandings, or arrangements by which such entity isbound to issue additional shares of capital stock. There are no voting trusts, proxies or similar voting arrangements withrespect to the capital stock of the Company.(c)Schedule 4.1(c) sets forth the name and title of each officer and director for each member of theCompany Group.4.2Authorization of TransactionsThe Company has full corporate power and authority to execute and deliver this Agreement and each of theTransaction Documents, as applicable, to which it is a party and to consummate the transactions contemplated thereby. No othercorporate proceedings on the part of the Company is necessary to approve and authorize the execution and delivery of this Agreementor the other Transaction Documents to which the Company is a party and the consummation of the transactions contemplated herebyand thereby. This Agreement and all other20Transaction Documents to which the Company is a party have been duly executed and delivered by the Company and constitute validand binding agreements of the Company, enforceable against the Company in accordance with their terms (subject to applicablebankruptcy, insolvency, reorganization, moratorium or other laws affecting generally the enforcement of creditors’ rights and subject togeneral principles of equity).4.3SubsidiariesExcept as set forth on Schedule 4.3 attached hereto, (i) at all times prior to the date hereof, the Company has nothad any Subsidiaries; and (ii) each Subsidiary set forth on Schedule 4.3 is directly and wholly-owned by the Company.4.4Sufficiency of AssetsThe assets of the Company Group, including the assets leased by the Company Group or provided by third-partiesto the Company Group, in each case, pursuant to valid Contracts, constitute all the assets and services used by the Company Group inoperating the Business of the Company Group as currently conducted. Buyer will acquire the Company Group with such assets at theClosing.4.5Absence of ConflictsExcept as set forth on Schedule 4.5 attached hereto, the execution, delivery and performance of this Agreementand the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby by the Company donot and shall not (a) conflict with or result in any breach of any of the terms, conditions or provisions of, (b) constitute a default under,(c) result in a violation of, (d) give any third party the right to modify, terminate or accelerate or cause the modification, termination oracceleration of, any obligation under, (e) result in the creation of any Lien upon any asset of the Company Group, or (f) require anyauthorization, consent, approval, exemption or other action by or notice or declaration to, or filing with, any Governmental Authority,under (i) the provisions of the formation documents of any member of the Company Group, (ii) any Material Contract, (iii) any Law towhich any member of the Company Group is subject or (iv) any judgment, order or decree to which any member of the CompanyGroup is subject.4.6Financial Statements(a)The Company has delivered to Buyer the following financial statements, copies of which are attachedhereto as Schedule 4.6(a) (collectively, the “Financial Statements”):(i)the audited consolidated balance sheets of the Company Group as of December 31, 2015 andDecember 31, 2016, and the related consolidated statements of operations, stockholders’ equity and cash flows forthe fiscal periods then ended, and the related notes to such financial statements;(ii)the unaudited consolidated balance sheet of the Company Group as of August 31, 2017 (the“Latest Balance Sheet”), and the related unaudited21consolidated statements of operations, stockholders’ equity and cash flows for the eight (8)-month period thenended.The Financial Statements fairly present in all material respects (i) the financial position of the Company Group and(ii) the results of operations, changes in cash flows and stockholders’ equity of the Company Group, as applicable, as of the date of andfor the periods referred to in such Financial Statement, and are consistent with the books and records of the Company Group, which inturn present fairly the financial condition and results of operations of the Company Group as of and for the periods referred totherein. Subject to the absence of footnotes and year-end audit adjustments with respect to any unreviewed Financial Statement (noneof which, alone or in the aggregate, are material), the Financial Statements have been prepared consistently and in accordance with theAccounting Policies and Principles, consistently applied.(b)To the Knowledge of the Seller, since September 4, 2012, there has never been (i) any actual fraud byany of the Company Group’s employees in connection with the preparation of any financial statements of the Company, or(ii) any willful misconduct by any Company Group employee in connection with the preparation of financial statements orthe internal accounting controls used by the Company Group or (iii) any written claim or allegation regarding any of theforegoing.4.7Absence of Undisclosed LiabilitiesNo member of the Company Group has any material Liability, whether incurred on or prior to the Closing, except(i) Liabilities reflected on the face of the Latest Balance Sheet, (ii) Liabilities under Contracts described in Schedule 4.11 orSchedule 4.12 or under Contracts which are not required to be disclosed thereon (but not Liabilities for breaches thereof), (iii)Liabilities which have arisen after the date of the Latest Balance Sheet in the Ordinary Course of Business otherwise in accordancewith the terms and conditions of this Agreement (none of which is a liability for breach of contract, breach of warranty, tort orinfringement or a claim or lawsuit or an environmental liability) and (iv) Liabilities disclosed on Schedule 4.7. No member of theCompany Group has any Liability, whether vested or contingent, for any activities which are unrelated to the operation of the Businessof the Company Group.4.8Absence of Certain DevelopmentsExcept as set forth in Schedule 4.8 and except as expressly contemplated by this Agreement, since the LatestBalance Sheet, the Company Group has conducted its business in all material respects only in the Ordinary Course ofBusiness. Except as set forth on Schedule 4.8, since the Latest Balance Sheet, the Company Group has not:(a)suffered a Material Adverse Effect or suffered any theft, damage, destruction or casualty loss in excessof Fifty Thousand Dollars ($50,000) in the aggregate to its assets (excluding costs associated with the maintenance andrepair of the Company Group’s equipment in the Ordinary Course of Business of the Company Group), whether or notcovered by insurance;22(b)borrowed any amount or incurred or become subject to any Indebtedness not otherwise disclosedpursuant to the terms of this Agreement;(c)discharged or satisfied any Lien or paid any Liability (other than Liabilities paid in the Ordinary Courseof Business), prepaid any amount of Indebtedness or subjected any portion of its properties or assets to any Lien;(d)sold, leased, licensed, assigned, transferred, pledged, allowed to lapse or cancel or otherwise disposedof or encumbered (including transfers to the Seller or any Insider) any of its tangible or intangible assets having an individualvalue in excess of Fifty Thousand Dollars ($50,000) (including Company Proprietary Rights) (except for sales of inventory,non-exclusive licenses granted in the Ordinary Course of Business to customers on an arm’s length basis), or disclosed anyconfidential information (other than pursuant to agreements requiring the person to whom the disclosure was made tomaintain the confidentiality of the Company Group in such confidential information);(e)waived, canceled, compromised or released any rights or claims of value in excess of Twenty FiveThousand Dollars ($25,000) individually or Fifty Thousand Dollars ($50,000) in the aggregate, whether or not in theOrdinary Course of Business;(f)entered into, amended or terminated any Material Contract;(g)implemented any employee layoffs;(h)made, granted or promised any bonus or any wage, salary or compensation increase to any director,officer, employee, sales representative or consultant or made, granted or promised any increase in any employee benefit planor arrangement, or established, adopted, entered into, amended (excluding any amendment required by Law) or terminatedany Employee Benefit Plan (or arrangement that, had it been in existence on the date of this Agreement, would be anEmployee Benefit Plan);(i)made any other change in employment terms for any of its directors and officers or entered into anytransaction with any Insider;(j)conducted its cash management customs and practices other than in the Ordinary Course of Business(including, without limitation, with respect to maintenance of working capital balances and inventory levels, collection oracceleration of accounts receivable, payment of accounts payable, accrued liabilities and other Liabilities and pricing andcredit policies);(k)made any individual capital expenditure in excess of Fifty Thousand Dollars ($50,000);(l)made any loans or advances to, or guarantees for the benefit of, any Persons (other than advances toemployees for travel and business expenses incurred in the Ordinary Course of Business which do not exceed Twenty FiveThousand Dollars ($25,000) in the aggregate);23(m)instituted or settled any claim or lawsuit for an amount involving in excess of Twenty Five ThousandDollars ($25,000) in the aggregate or involving equitable or injunctive relief;(n)acquired any other business or Person (or any significant portion or division thereof), whether bymerger, consolidation or reorganization or by purchase of its assets or stock or acquired any other material assets outside theOrdinary Course of Business;(o)received any notice of any claim or potential claim of ownership, interest or right by any Person otherthan the Company in or to the Company Proprietary Rights, or of infringement, misappropriation, dilution or misuse by theCompany Group of any other Person’s Proprietary Rights;(p)materially changed the pricing or royalties set or charged by the Company Group to its customers orlicensees pursuant to the terms of existing Contracts as in effect as of the date hereof; or(q)committed or agreed to do any of the foregoing.4.9Real Property(a)Schedule 4.9(a)-1 sets forth the address of each Leased Real Property, and a complete list of all Leases(including all amendments, extensions, renewals, guaranties and other written agreements with respect thereto) for each suchLeased Real Property (including the date and name of the parties to such Lease document). The Company has delivered toBuyer a complete copy of each such Lease document. Except as set forth in Schedule 4.9(a)-2, with respect to each of theLeases: (i) such Lease is legal, valid, binding, enforceable against the applicable member of the Company Group and is infull force and effect; (ii) the Company Group’s possession and quiet enjoyment of the Leased Real Property under suchLease has not been disturbed, and there are no disputes with respect to such Lease; (iii) no member of the Company Groupor, to the Knowledge of the Seller, any other party to the Lease is in material breach or material default under such Lease,and no event has occurred or circumstance exists which, with the delivery of notice, the passage of time or both, wouldconstitute such a breach or default, or permit the termination, modification or acceleration of rent under such Lease; and (iv)the other party to such Lease is not an Affiliate of, and otherwise does not have any economic interest in, the CompanyGroup.(b)Except as set forth on Schedule 4.9(a), the Company Group has a valid leasehold interest in the LeasedProperty.(c)Except as set forth on Schedule 4.9(c), the buildings, improvements, computer equipment, personalproperties, vehicles and other tangible assets of the Company Group are operated in conformity with all applicable laws andregulations, are structurally sound (in the case of the buildings and improvements), are in good condition and repair, exceptfor reasonable wear and tear not caused by neglect excepted, and are usable in the Ordinary Course of Business of theCompany as currently conducted.244.10TaxesExcept as set forth on Schedule 4.10, (i) the Company Group has timely filed all Tax Returns which are requiredto be filed, taking into account any extension of time to file granted to or validly obtained on behalf thereof; and all such Tax Returnsare true, complete and accurate in all material respects, (ii) all Taxes due and payable by the Company Group, whether or not shownon a Tax Return, have been paid, and no such Taxes are delinquent, (iii) since the date of the Latest Balance Sheet, the CompanyGroup has not incurred any Liabilities for Taxes outside the Ordinary Course of Business; (iv) no deficiency for any amount of Taxhas been asserted or assessed by a taxing authority against any member of the Company Group and the Company does not reasonablyexpect that any such assertion or assessment of Tax liability will be made, (v) there is no action, suit, proceeding or audit or any noticeof inquiry of any of the foregoing currently in progress or pending against or with respect to any member of the Company Groupregarding Taxes and, to the Knowledge of the Seller, no action, suit, proceeding or audit has been threatened against or with respect toany member of the Company Group regarding Taxes, (vi) no member of Company Group has consented to extend the time in whichany Tax may be assessed or collected by any taxing authority, which extension will remain in effect after the Closing, (vii) no memberof the Company Group has been a member of an Affiliated Group, other than any such group of which the Company is the commonparent, (viii) no claim has ever been made in writing by a taxing authority in a jurisdiction where a member of the Company Groupdoes not file Tax Returns that such entity, as applicable, is or may be subject to Taxes assessed by such jurisdiction, (ix) the CompanyGroup does not have any Liability for Taxes of any other Person under Treasury Regulations Section 1.1502-6 (or any similarprovision of state, local or foreign Tax law), as a transferee, by contract, or otherwise, (x) the Company Group has withheld and paidall Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor,creditor, member or other third party, (xi) each contract, arrangement, or plan of the Company Group that is a “nonqualified deferredcompensation plan” (as defined for purposes of Code Section 409A(d)(1)) is, and has been, in material compliance with CodeSection 409A and the applicable guidance issued thereunder, (xii) the Company Group has no obligation to reimburse or “gross-up”any Person for any Taxes imposed under Section 4999 or 409A of the Code, (xiii) no Person holds Shares that are subject to a“substantial risk of forfeiture” within the meaning of Code §83 and the Treasury Regulations promulgated thereunder for which a validCode §83(b) election has not been made, (xiv) no amount that could be received (whether in cash or property or the vesting ofproperty) as a result of the consummation of the transactions contemplated hereby by any employee officer, director, stockholder orother service provider of any member of the Company Group would not be deductible by reason of Section 280G of the Code orwould be subject to an excise tax under Section 4999 of the Code, (xv) the Company Group will not be required to include anymaterial item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof)ending after the Closing Date as a result of any: (A) change in method of accounting for a taxable period ending on or prior to theClosing Date; (B) “closing agreement” as described in Code Section 7121 (or any corresponding or similar provision of state, local orforeign income Tax law) executed prior to the Closing; (C) intercompany transactions occurring at or prior to the Closing or any excessloss account in existence at Closing described in Treasury Regulations under Code Section 1502 (or any corresponding or similarprovision of state, local or foreign income Tax law); (D) any use of an improper method of accounting for a taxable period ending onor prior to the Closing Date; (E) installment sale or open transaction disposition made prior to the Closing; (F) prepaid amount25received prior to the Closing; or (G) election by any member of the Company Group under Code Section 108(i), (xvi) in the two yearperiod preceding the date hereof, the Company Group has not distributed stock of another Person, or has not had its stock distributedby another Person, in a transaction that was purported or intended to be governed in whole or in part by Code Section 355 or CodeSection 361, and (xvii) the Company is not participating, and has not participated, in any “reportable transaction” as defined in CodeSection 6707A(c)(1) and Treasury Regulation Section 1.6011-4(b). Notwithstanding anything to the contrary in this Agreement, theCompany makes no representations or warranties in respect of the existence, amount, usability, or limitations on usage of the Taxattributes of any member of the Company Group for Tax periods (or portions thereof) beginning on or after the Closing Date,including, without limitation, net operating losses, capital loss carry forwards, foreign tax credit carry forwards, asset bases, researchand development credits, and depreciation periods. The representations and warranties set forth in this Section 4.10 and Section 4.18(to the extent related to Tax) are the Company’s sole and exclusive representations and warranties regarding Tax matters of theCompany Group.4.11Contracts and CommitmentsExcept as set forth on Schedule 4.11(a) attached hereto, no member of the Company Group is, as of the date ofthis Agreement, a party to or bound by any (each of the agreements required to be disclosed pursuant to this Section 4.11, a “MaterialContract”):(a)Contract with any employee, director, officer, or other service provider providing (A) for employmentor engagement on a full-time, part-time or consulting basis, (B) severance benefits, or (C) any change in control, sale,transaction or retention bonus;(b)guarantee of any Liability or obligation of another Person (other than another member of the CompanyGroup), in each case, other than commercial customer, supplier or vendor contracts entered into in the Ordinary Course ofBusiness the primary purpose of which is not a guarantee;(c)Contract under which it is lessee of or holds or operates any personal property owned by any otherparty, except for any lease of personal property under which the aggregate annual rental payments do not exceed $150,000;(d)Contract under which it is a licensee of or is otherwise granted by a third party any rights to use anyProprietary Rights (other than commercially available off-the-shelf software products licensed under non-exclusive end-userobject code license agreements);(e)Contract under which it is a licensor or otherwise grants to a third party any rights to use any CompanyProprietary Rights (other than Proprietary Rights licensed to customers on a non-exclusive basis in the Ordinary Course ofBusiness);(f)material (A) joint development Contract, (B) joint venture Contract, or (C) strategic alliance or similarContract;(g)Contract under which it is lessor of or permits any third party to hold or operate any material personalproperty owned or controlled by it;26(h)collective bargaining agreement or other agreement with any labor union or other labor organization;(i)currently effective settlement, conciliation or similar Contract with any Governmental Authority orpursuant to which any member of the Company Group will have any outstanding monetary obligation after the date of thisAgreement in excess of $150,000 or any material non-monetary obligations;(j)Lease;(k)Contract with an Material Customer or Material Supplier;(l)Contract (or group of related Contracts with the same party) that (A) is not a Contract between anymember of the Company Group and a customer of the Company Group and (B) involves consideration or an outstandingmonetary obligation after the date of this Agreement in excess of $150,000;(m)Contract concerning confidentiality or non-competition or otherwise including provisions on jointprice-fixing, market or customer sharing, exclusivity or market classification;(n)Contract relating to the provision of co-location or software, data or infrastructure hosting services to theCompany Group; or(o)Contract for the development of Proprietary Rights for the benefit of the Company Group.(p)The Seller has delivered to Buyer true, correct and complete copies of each written Material Contract,together with all amendments, waivers and other changes thereto, and true, correct and complete summaries of the materialterms of each oral Material Contract, if any. Except as disclosed on Schedule 4.11(b), (i) no Material Contract has beencanceled or, to the Knowledge of the Seller, breached by the other party, and the Seller has no Knowledge of any plannedbreach by any other party to any Material Contract, (ii) the Company Group has performed in all material respects all theobligations required to be performed by it in connection with the Material Contracts and is not in material default under or inmaterial breach of any Material Contract, and, to the Knowledge of the Seller, no event or condition has occurred or arisenwhich with the passage of time or the giving of notice or both would result in a material default or material breachthereunder, and (iii) each Material Contract is legal, valid, binding, enforceable against the applicable member of theCompany Group (subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting generallythe enforcement of creditors’ rights and subject to general principle of equity) and is in full force and effect.(q)Since September 4, 2012, no member of the Company Group has used any name or names underwhich it has invoiced account debtors, maintained records regarding its assets or otherwise conducted business other than theexact names set forth on Schedule 4.11(b).274.12Government ContractsWithin the last three (3) years, the Company Group has not (a) breached or violated any Law, clause or othermaterial requirement pertaining to any Government Contract; (b) been excluded from bidding by a Governmental Authority; (c) beenaudited or investigated by any Governmental Authority with respect to any Government Contract; (d) conducted or initiated anyinternal investigation or made any disclosure with regard to any irregularity in connection with a Government Contract.4.13Proprietary Rights(a)Schedule 4.13(a) sets forth a complete and correct list of: (i) all U.S. and foreign patents and patentapplications owned or filed by the Company Group; (ii) all registered and material unregistered trademarks, service marks,and trade names (and applications therefor) owned by the Company Group; (iii) all registered copyrights owned by theCompany Group; (iv) all Internet domain names owned by the Company Group (collectively, the “Registered IntellectualProperty”). The Company Group does not own any proprietary software.(b)(i) Except as set forth on Schedule 4.13(b)(i), the Company Group exclusively owns and possesses allright, title and interest in and to the Registered Intellectual Property, and exclusively owns and possesses all right, title andinterest in and to, or has a valid and enforceable written license to use, each other Proprietary Right used or exploited in theoperation of the Business of the Company Group as currently conducted (collectively, the “Company Proprietary Rights”)free and clear of all Liens; (ii) except as set forth on Schedule 4.13(b)(ii), no claim by any Person contesting the validity,enforceability, use or ownership of any of the Owned Proprietary Rights has been made, is currently outstanding or isthreatened in writing, and, to the Knowledge of the Seller, there are no grounds for the same; (iii) no loss or expiration ofany Company Proprietary Rights is pending or threatened or, to the Knowledge of the Seller, reasonably foreseeable; (iv) nomember of the Company Group received any written notices of, nor to the Knowledge of the Seller, are there any factswhich indicate a reasonable likelihood of, any infringement, misappropriation or dilution by, or other possible conflict by,any Person with respect to any Owned Proprietary Rights, or the Company with respect to any Proprietary Rights of anyother Person (including any demand or request that the Company license rights from a third party); (v) no member of theCompany Group (including the operation) has infringed, misappropriated, diluted or otherwise conflicted with anyProprietary Rights of any other Person; and (vi) to the Knowledge of the Seller, the Owned Proprietary Rights have not beeninfringed, misappropriated, diluted or conflicted by any other Person.(c)Except as set forth on Schedule 4.13(c), the Company has not disclosed any of its trade secrets orconfidential information to any third party other than pursuant to a written confidentiality agreement. The Company hastaken commercially reasonable actions to maintain and protect the Company Proprietary Rights, including the value of anytrade secrets and any confidential information of the Company Group or of any third party that has been disclosed to theCompany Group under an obligation of confidentiality.28(d)All employees and consultants responsible for the development of any Company Proprietary Rights forthe Company: (i) have maintained the confidentiality of any proprietary or confidential information of the Company; and (ii)have not asserted any personal claim or interest in any Company Proprietary Rights developed by such individual. Exceptas set forth on Schedule 4.13(d), all employees and consultants responsible for the development of any Company ProprietaryRights for the Company have executed and delivered to the Company written agreements providing that such individual orentity (1) shall maintain the confidentiality of any proprietary or confidential information of the Company; and (2 haveassigned to the Company all right, title and interest in and to the Company Proprietary Rights developed by such individualor entity. To the Knowledge of the Seller, there have been no breaches or alleged breaches of any such instrument by suchindividual or entity.(e)The computer software and hardware, and other elements of automated communications equipment ordata or information processing systems, including any outsourced systems used or relied upon by the Company (collectively,the “IT Systems”) are sufficient for the Business of the Company Group as currently conducted and have not suffered anyoutage or failure in the past twelve (12) months that has not been remediated in all material respects. The Companymaintains commercially reasonably security and backup plans and procedures. The Company has taken commerciallyreasonable steps to protect and preserve the integrity and operation of the IT Systems. There have been no unauthorizedintrusions into or breaches of the IT Systems. The Company has obtained and possesses valid licenses to use all of thesoftware programs present on the computers and other software-enabled electronic devices and IT Systems that it uses inconnection with its business. The Company is in compliance with, and has a sufficient number of licenses for the operationof such IT Systems as currently conducted.(f)There have not been any material problems, defects, or deficiencies in any of the Company Productsthat: (i) prevent such Company Products from operating substantially as described in its related documentation orspecifications; (ii) prevent such Company Products from operating in all material respects as warranted to any third party; or(iii) prevent the Company from conducting its Business as currently conducted. The Company Proprietary Rights include allsource-code, object code and other documentation and materials necessary to operate the Business of the Company ascurrently conducted, including installation and user documentation, engineering specifications, flow charts, and know-howreasonably necessary for the use, maintenance, enhancement, development and other exploitation of the Company Products.(g)The Company and the conduct of its business have complied with all applicable Laws and Contractsentered into by the Company which contain confidentiality obligations and the Company’s own policies, rules andprocedures relating to the access, use, collection, processing, storage, sharing, distribution, disclosure, transfer, destruction ordisposal of any personal, sensitive, or confidential information or data (whether in electronic or any other form or medium)disclosure and transfer of any such information or data collected or processed by the Company or by third parties havingauthorized access to the records of the Company. No written claims have been asserted or threatened against the Companyby any Person alleging a violation of such Person’s privacy, personal or29confidentiality rights under the privacy policies of the Company, under any Contracts entered into by the Company whichcontain confidentiality obligations, or under any Law. With respect to all information and data described in this section, theCompany has taken industry standard steps reasonably necessary (including implementing and monitoring compliance withadequate measures with respect to technical, physical, organizational and administrative security) to ensure that theinformation and data is protected against loss and against unauthorized access, use, modification, disclosure or othermisuse. There has been no unauthorized access to or other misuse of such information or data.4.14Litigation; ProceedingsExcept as set forth in Schedule 4.13, there are no, and since September 4, 2012, there have been no, Actions,judgments or decrees pending or, to the Knowledge of the Seller, threatened against or affecting any member of the Company Groupat law or in equity, or before or by any Governmental Authority, and to the Knowledge of the Seller there is no basis for any of theforegoing. Since September 4, 2012, the Company Group has not received any formal written legal opinion (excluding emails andother ordinary course correspondence) of the Company’s legal counsel to the effect that the Company Group is exposed from a legalstandpoint to any liability which may be material to the business of the Company Group as previously, presently or proposed to beconducted. The Company Group is not subject to any outstanding order, judgment or decree issued by any Governmental Authority.4.15BrokerageExcept as set forth on the Schedule 4.15, there are no other claims for brokerage commissions, finders’ fees orsimilar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreementmade by or on behalf of the Company Group.4.16Governmental Licenses and PermitsSchedule 4.16 contains a complete listing of all material permits, licenses, franchises, certificates, approvals,consents, certificates of authorization, registrations and other authorizations of foreign, federal, state and local governments orregulatory authorities, or other similar rights (collectively, the “Licenses”) owned or possessed by the Company Group or used by theCompany Group. The Company Group owns or possesses all right, title and interest in and to all Licenses which are necessary toconduct the business of the Company Group as currently conducted. The Company Group is currently in compliance in all materialrespects with the terms and conditions of such Licenses. No loss or expiration of any License is pending or, to the Knowledge of theSeller, threatened (including, without limitation, as a result of the transactions contemplated hereby) other than expiration in accordancewith the terms thereof, which terms do not expire as a result of the consummation of the transactions contemplated hereby. Theconsummation of the transactions contemplated by this Agreement will not require any consent, renewal or formal notice with respectto any License.4.17Employees30(a)Except as disclosed on Schedule 4.17(a), to the Knowledge of the Seller, no executive employee and nogroup of employees or independent contractors of the Company Group has any plans to terminate, or materially alter thenature of, his, her or their employment or relationship as an independent contractor with the Company Group. Each memberof the Company Group has complied with and is in compliance in all material respects with all applicable Laws relating toemployment and labor, including provisions thereof relating to wages, hours, vacation, employee leave, overtime,employment discrimination, workers’ compensation, termination and severance pay, human rights, occupational health andsafety, equal opportunity, labor relations, collective bargaining and the payment of social security and other Taxes, theWARN Act, and the Immigration Reform and Control Act of 1986. The Company Group is not a party to or bound by anycollective bargaining agreement or other agreement or relationship with any labor organization. There are no pending or, tothe Knowledge of the Seller, threatened strikes, walkouts, lockouts, slowdowns, picketing, grievances, unfair labor practicecharges or complaints or other material employee or labor disputes against or affecting the Company Group, and no suchlabor disputes have occurred since September 4, 2012. There is no pending or, to the Knowledge of the Seller, threatened,unfair labor practice charge or complaint against the Company Group. The Seller does not have any Knowledge of anyorganizational effort presently being made or threatened by or on behalf of any labor organization with respect to employeesof the Company Group and since September 4, 2012, to the Knowledge of the Seller, there have been noorganizational efforts by or on behalf of any labor organization with respect to employees of the Company Group. To theKnowledge of the Seller, no employee or independent contractor of the Company Group is subject to any noncompete,nondisclosure, confidentiality, employment, consulting or similar Contract relating to, affecting or in conflict with theBusiness as currently conducted by the Company Group or with respect to such employee’s or independent contractor’sright to be employed or engaged by the Company Group. Except as could not result in material Liability, the CompanyGroup has fully and timely paid all wages, salaries, wage premiums, commissions, bonuses, expense reimbursements,severance and other compensation that has come due and payable to its current and former employees and other servicesproviders under applicable Law, Contract, or Company Group policy. Each individual who has provided services to theCompany Group, Seller, or any of its Affiliates within the past three (3) years and who was classified and treated as anindependent contractor was properly classified and treated as such for purposes of applicable Law. In the past three (3)years, the Company Group has not implemented any employee layoffs that did or could give rise to notice or paymentobligations under the WARN Act.(b)Except as disclosed on Schedule 4.17(b), no member of the Company Group is party to any agreementwhich could require any member of the Company Group to pay any additional compensation, bonuses (including, withoutlimitation, any change in control, transition, sale or retention bonuses) or other amounts as a result, in whole or in part, of theexecution and delivery of this Agreement or the other Transaction Documents or the consummation of the transactionscontemplated hereby and thereby.4.18Employee Benefit Plans31(a)Schedule 4.18(a) contains a true and complete list of each employee pension benefit plans (as defined inSection 3(2) of ERISA), employee welfare benefit plans (as defined in Section 3(1) of ERISA), and each other health,welfare, post-employment welfare, retirement, disability, stock option, restricted stock unit, stock appreciation rights,phantom equity, equity incentive, equity-based, profits interest, stock purchase, change in control, retention, deferredcompensation (whether qualified or nonqualified), bonus, incentive, severance, separation, employment, paid-time off, orother material benefit or compensation plans, programs, policies, contracts, agreements or arrangements, whether in writingor oral and whether or not terminated, that are sponsored, maintained or contributed to by any members of the CompanyGroup or with respect to which the Company Group has any Liability (“Employee Benefit Plans”). No employee BenefitPlan is nor does any member of the Company Group have any Liability with respect to a (i) plan that is or was subject toTitle IV of ERISA or Section 412 of the Code, (ii) “multiemployer plan” (as defined in Section 3(37) of ERISA), (iii)“multiple employer plan” (as defined in Section 413 of the Code) or (iv) “multiple employer welfare arrangement” (asdefined in Section 3(40) of ERISA), including as a consequence of at any time being considered a single employer underSection 414 of the Code with any ERISA Affiliate. The Company Group has no current or potential Liability or obligationto provide post-termination or post-employment health, life or other “welfare-type” benefits, other than in accordance withSection 4980B of the Code or other similar applicable state Law.(b)The Employee Benefit Plans (and related trusts) have been funded, administered and maintained, inform and in operation, in all material respects in accordance with their terms and the requirements of applicable Laws andregulations, including ERISA and the Code; and the Employee Benefit Plans which are intended to be “qualified plans”qualify under Section 401(a) of the Code, and each such Employee Benefit Plan, and each trust (if any) forming a partthereof, has received a favorable determination letter from the Internal Revenue Service or is entitled to rely on a favorableopinion letter from the Internal Revenue Service as to the qualification under the Code of such Employee Benefit Plan andthe tax‑exempt status of such related trust and, to the Knowledge of Seller, nothing has occurred that could adversely affectthe qualification of such Employee Benefit Plan or the tax exempt status of such related trust.(c)Except as set forth on Schedule 4.18(c), all required reports and descriptions (including Form 5500Annual Reports, Summary Annual Reports and Summary Plan Descriptions) with respect to each Employee Benefit Planhave been properly and timely filed with the appropriate government agency and distributed to participants as required.(d)Except as set forth on Schedule 4.18(d), with respect to each Employee Benefit Plan, all contributions,distributions, reimbursements, and other payments which are due (including all employer contributions and employee salaryreduction contributions) have been paid to such Employee Benefit Plan on a timely basis, all contributions, distributions,reimbursements, and other payments for prior plan years which are not yet due and with respect to the current plan year forthe period ending on the Closing Date have been made or accrued in accordance with the Accounting Policies andPrinciples in the Company Group’s financial statements, and, with respect to employee welfare benefit plans, all premiumsor other payments which are due have been paid on a timely basis. 32Except as taken into account in determining Estimated Working Capital, no unfunded liability exists with respect to anyEmployee Benefit Plan.(e)With respect to each Employee Benefit Plan, (i) there have been no prohibited transactions as defined inSection 406 of ERISA or Section 4975 of the Code, (ii) no fiduciary (as defined in Section 3(21) of ERISA) has anymaterial Liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration orinvestment of the assets of such Employee Benefit Plans, (iii) no actions, audits, investigations, hearings, proceedings, suitsor claims with respect to the assets thereof (other than routine claims for benefits) are pending or, to the Knowledge of theSeller, threatened, and the Seller has no Knowledge of any facts which would give rise to or could reasonably be expectedto give rise to any such actions, audits, investigations, hearings, proceedings, suits or claims, and (iv) each Employee BenefitPlan that is a “group health plan” as defined in Section 733(a)(1) of ERISA has complied in all material respects with theAffordable Care Act.(f)With respect to each of the Employee Benefit Plans, the Company has furnished to Buyer true andcomplete copies of (i) the plan documents (including any adoption agreement, if applicable), summary plan descriptions,summaries of material modifications, other material employee communications and a summary of any unwritten EmployeeBenefit Plan, (ii) the most recent determination letter or opinion letter received from the Internal Revenue Service, (iii) theForm 5500 Annual Reports (including all schedules and other attachments) for the most recent three (3) years, (iv) all relatedtrust agreements, insurance contracts or other funding agreements which implement such Employee Benefit Plans and (v) allContracts relating to each such plan, including, without limitation, service provider agreements, insurance contracts,investment management agreements and recordkeeping agreements.(g)Except as disclosed in Schedule 4.18(f) the consummation of the transactions contemplated by thisAgreement (either alone or in combination with any other event) will not accelerate the time of the payment, funding orvesting of, or increase the amount of, or result in the forfeiture of compensation or benefits under any Employee Benefit Planor any other employee benefit arrangement.4.19Insurance. Schedule 4.19 lists each insurance policy maintained by or on behalf of the Company Group with respect to theproperties, assets and business of the Company Group, together with a claims history for the past two (2) years. All of such insurancepolicies are in full force and effect, and since September 4, 2012 the Company Group has not been (i) in default with respect to itsLiabilities under any such insurance policies or (ii) denied insurance coverage. The Company Group has no self-insurance or co-insurance programs.4.20Affiliate TransactionsExcept as disclosed on Schedule 4.20, no officer, director, stockholder or other Affiliate or, to the Knowledge ofthe Seller, any employee of the Company Group or any individual33related by blood, marriage or adoption to any such Person or any entity in which any such Person owns any beneficial interest(collectively, the “Insiders”), is a party to any Contract with the Company Group or which is pertaining to the business of theCompany Group or has any interest in any property, real or personal or mixed, tangible or intangible, used in or pertaining to thebusiness of the Company Group, in each case, other than offer letters, employment agreements, agreements relating to confidentialityand ownership of intellectual property, and other agreements entered into with employees in the Ordinary Course of Business of theCompany Group.4.21Compliance with LawsExcept as set forth in Schedule 4.21, (a) the Company Group and its officers, directors, stockholders, andemployees (in their capacity as such) have since September 4, 2012 complied in all material respects with and are currently incompliance in all material respects with all Laws which are applicable to the Business or the Company Group or any owned or leasedproperties of the Company Group and to which the Company Group or its officers, directors, stockholders, and employees (in theircapacity as such) are subject, and (b) since September 4, 2012, (i) no claims have been filed against the Company Group alleging aviolation of any such Laws and (ii) the Company Group has never received notice of any such violations.4.22Powers of Attorney; GuaranteesThere are no outstanding powers of attorney executed on behalf of the Company Group other than the CompanyGroup’s accountants for Tax purposes and customary grants pursuant to equipment leases or similar arrangements with respect to thefiling of financing statements and the Company Group is not a guarantor of any Indebtedness of any other Person other thanendorsements for collection in the Ordinary Course of Business of the Company Group.4.23Environmental ComplianceExcept as set forth on Schedule 4.23 hereof:(a)The Company Group is and since September 4, 2012 has been in compliance in all material respectswith all Environmental Laws, which compliance has included obtaining, maintaining, and complying with all Licensesrequired pursuant to Environmental Laws.(b)The Company Group has not since September 4, 2012, or earlier if outstanding, received any notice,report, or other information from any Governmental Authority or any Person regarding any material violation of, or materialLiability under, any Environmental Law.(c)The Company Group has not manufactured, distributed, released, transported, treated, handled, stored,disposed or arranged for the disposal of, or exposed any Person to, any Hazardous Material, or owned or operated anyproperty or facility contaminated by any Hazardous Material, in each case, so as has given or would give rise to any materialLiability under any Environmental Law.34(d)The Company Group has not assumed, undertaken, become subject to, or provided an indemnity withrespect to, any material Liability of any other Person relating to Environmental Laws or Hazardous Materials.(e)The Company Group has not designed, manufactured, sold, marketed, installed, repaired, or distributedCompany Products or other items containing asbestos or other Hazardous Materials and is not subject to any Liabilities withrespect to the presence of asbestos or other Hazardous Materials in any Company Product or other such items or in or uponany property, premises, or facility.(f)The Seller or the Company Group has furnished to Buyer all environmental audits, assessments, andreports and all other material environmental, health and safety documents, in each case relating to the Company Group’s pastor current properties, facilities, or operations which are in their possession or under their reasonable control.4.24Customer and Supplier RelationshipsAttached as Schedule 4.24 is a list of (i) the names of each customer of the Company Group (by dollar amount ofsales to such customers) that represents more than ten percent (10%) of the sales of the Company Group as a whole (the “MaterialCustomers”), and (ii) a list of the names of the top ten (10) suppliers and vendors of the Company Group (by dollar amount ofpurchases from such suppliers and vendors) (the “Material Suppliers”), for each of the fiscal years ended December 31, 2015 andDecember 31, 2016 and the eight (8) month period ended August 31, 2017. No Material Supplier has canceled any Contract with, orotherwise ceased to do business with, the Company Group and, to the Knowledge of the Seller, there has been no threat in writing byany such Material Supplier to stop, materially decrease the rate of, or materially change the terms (whether related to payment, price orotherwise) with respect to, supplying materials, products or services to the Company Group at any time in the last two (2) years(whether as a result of the consummation of the transactions contemplated hereby or otherwise). No Material Customer has cancelledany Contract with, or otherwise ceased to do business with, the Company Group, and, to the Knowledge of the Seller, no suchMaterial Customer has given notice to the Company Group in writing that it will materially decrease the rate of its purchases of goodsand services from the Company Group (for purposes of clarification, excluding notices and other communications regarding ordinarycourse fluctuations from time to time). Notwithstanding the forgoing, neither the Seller nor the Company makes any representation orwarranty with respect to (i) the Company Group’s relationship with Buyer or any of its Affiliates as a customer of the Company Groupor (ii) the impact of the announcement of the transactions contemplated hereby or the consummation thereof on any of its relationshipswith its Material Suppliers or Material Customers.4.25InventoryThe Company Group maintains sufficient inventory to conduct the business of the Company Group in theOrdinary Course of Business. Except as set forth on Schedule 4.25, all inventory has been valued at the lesser of cost or market. Tothe Knowledge of the Seller, the quantities of each item of inventory (whether raw materials, intermediaries, work-in-process orfinished goods) are not excessive and are reasonable (and not insufficient) in the present35circumstances of the business of the Company Group. Except as set forth on Schedule 4.25, the Company Group is not in possessionof any inventory that is not owned by the Company Group, including goods already sold.4.26International Trade and Anti-Corruption Matters(a)Neither the Company Group, nor any of its officers, directors or employees, nor to the Knowledge ofthe Seller, any agent, (x) is currently, or has been in the last five years: (i) a Sanctioned Person, (ii) organized, resident orlocated in a Sanctioned Country, (iii) engaging in any dealings or transactions with any Sanctioned Person or in anySanctioned Country, to the extent such activities violate applicable Sanctions Laws or Ex-Im Laws, (iv) engaging in anyexport, reexport, transfer or provision of any goods, software, technology, data or service without, or exceeding the scope of,any required or applicable licenses or authorizations under all applicable Ex-Im Laws, or (v)otherwise in violation ofapplicable Sanctions Laws, Ex-Im Laws, or U.S. anti-boycott Laws (collectively, “Trade Control Laws”); or (y) has at anytime made any unlawful payment or given, offered, promised, or authorized or agreed to give, any money or thing of value,directly or indirectly, to any Government Official or other Person in violation of any applicable Anti-Corruption Laws.(b)Since September 4, 2012, the Company Group has not, in connection with or relating to the business ofthe Company Group, received from any Governmental Authority or any other Person any notice, inquiry, or internal orexternal allegation; made any voluntary or involuntary disclosure to a Governmental Authority; or conducted any internalinvestigation or audit concerning any actual or potential violation or wrongdoing, in each case related to Trade Control Lawsor Anti-Corruption Laws.4.27NO ADDITIONAL REPRESENTATIONS AND WARRANTIESEXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THECOMPANY EXPRESSLY SET FORTH IN THIS AGREEMENT AND IN ANY OTHER TRANSACTION DOCUMENT TOWHICH THE SELLER OR THE COMPANY IS A PARTY, NEITHER THE COMPANY, THE SELLER, NOR ANY OFTHEIR RESPECTIVE AFFILIATES OR REPRESENTATIVES MAKES OR HAS MADE, AND THE SELLER AND THECOMPANY HEREBY DISCLAIM, ANY ADDITIONAL REPRESENTATIONS OR WARRANTIES OF ANY KIND ORNATURE, EXPRESS OR IMPLIED, INCLUDING AS TO THE CONDITION, VALUE OR QUALITY OF THE BUSINESSOR THE ASSETS OF THE COMPANY GROUP OR THE MERCHANTABILITY, USAGE, SUITABILITY OR FITNESSFOR ANY PARTICULAR PURPOSE WITH RESPECT TO SUCH ASSETS OR BUSINESS, OR ANY PART THEREOF, ORAS TO THE WORKMANSHIP THEREOF, OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT ORPATENT, IT BEING UNDERSTOOD THAT SUCH SUBJECT ASSETS ARE BEING ACQUIRED “AS IS, WHERE IS” ONTHE CLOSING DATE, AND IN THEIR PRESENT CONDITION, AND BUYER SHALL RELY ON ITS OWNEXAMINATION AND INVESTIGATION THEREOF.36ARTICLE V REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE SELLERAs a material inducement to Buyer to enter into and perform its obligations under this Agreement, the Sellerhereby represents and warrants to Buyer, as of the date hereof and as of the Closing, that:5.1SharesExcept as set forth on Schedule 5.1, the Seller holds of record and owns beneficially the Shares and has full right,power and authority to transfer such Shares to Buyer, free and clear of any Liens, other than Liens resulting from this Agreement. TheSeller is not a party to any option, warrant, purchase right, or other contract or commitment that could require the Seller to sell, transfer,or otherwise dispose of any capital stock of the Company (other than this Agreement). Except as set forth on Schedule 5.1, the Selleris not a party to any shareholders agreement, voting agreement, voting trust, proxy, or other agreement or understanding with respect tothe voting of any capital stock of the Company.5.2Authorization of TransactionsThe Seller has full limited liability company power, authority and legal capacity to enter into this Agreement andthe other Transaction Documents to which the Seller is a party and to perform its obligations hereunder and thereunder. ThisAgreement and the other Transaction Documents to which the Seller is a party have been duly executed and delivered by the Sellerand constitute valid and binding agreements of the Seller, enforceable in accordance with their respective terms (subject to applicablebankruptcy, insolvency, reorganization, moratorium or other laws affecting generally the enforcement of creditors’ rights and subject togeneral principles of equity).5.3Absence of ConflictsExcept as set forth on Schedule 5.3, either the execution and the delivery of this Agreement and the otherTransaction Documents to which any Seller is a party, nor the consummation of the transactions contemplated hereby and thereby,shall (a) conflict with, result in a breach of any of the provisions of, (b) constitute a default under, (c) result in the violation of, (d) giveany third party the right to terminate or to accelerate any obligation under, or (e) require any authorization, consent, approval, executionor other action by or notice to any court or other governmental body, under the provisions of any Contract to which the Seller is boundor affected, or any statute, regulation, rule, judgment, order, decree or other restriction of any government, governmental agency orcourt to which the Seller is subject.5.4BrokerageThere are no claims for brokerage commissions, finders’ fees or similar compensation in connection with thetransactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of the Seller.5.5Litigation37There are no actions, suits, proceedings or orders pending or, to the Knowledge of the Seller, threatened against oraffecting the Seller at law or in equity, or before or by any federal, state, municipal or other governmental department, commission,board, bureau, agency or instrumentality, domestic or foreign, which would adversely affect the Seller’s performance under thisAgreement and the other Transaction Documents to which the Seller is a party or the consummation of the transactions contemplatedhereby or thereby.5.6Governmental Authorities and ConsentsExcept as set forth on Schedule 5.6, (i) the Seller is not required to submit any notice, report or other filing withany governmental authority in connection with the execution or delivery by it of this Agreement and the other Transaction Documentsto which the Seller is a party or the consummation of the transactions contemplated hereby or thereby, and (ii) no consent, approval orauthorization of any governmental or regulatory authority is required to be obtained by any Seller in connection with its execution,delivery and performance of this Agreement and the other Transaction Documents to which the Seller is a party or the transactionscontemplated hereby or thereby.5.7NO ADDITIONAL REPRESENTATIONS AND WARRANTIESEXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF THE SELLER SET FORTH IN THISAGREEMENT AND IN ANY OTHER TRANSACTION DOCUMENT TO WHICH THE SELLER IS A PARTY, NEITHERTHE SELLER, THE COMPANY, NOR ANY OF THEIR RESPECTIVE AFFILIATES OR REPRESENTATIVES MAKES,OR HAS MADE, AND THE SELLER HEREBY DISCLAIMS, ANY ADDITIONAL REPRESENTATIONS ORWARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED.ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYERAs a material inducement to the Seller and the Company to enter into and perform their respective obligationsunder this Agreement, Buyer hereby represents and warrants to the Seller and the Company, as of the date hereof and as of theClosing, that:6.1Organization and Corporate PowerBuyer is duly organized, validly existing and in good standing under the laws of its jurisdiction offormation. Buyer is not in default under or in violation of any provision of its certificate of incorporation.6.2Authorization of TransactionBuyer has full corporate power and authority to execute and deliver this Agreement and each of the TransactionDocuments to which it is a party and to consummate the transactions contemplated hereby and thereby. The board of directors ofBuyer has duly approved this Agreement and all other Transaction Documents to which it is a party and has duly authorized theexecution and delivery of this Agreement and all other Transaction Documents to which it is a38party and the consummation of the transactions contemplated hereby and thereby. No other corporate proceedings on the part ofBuyer are necessary to approve and authorize the execution and delivery of this Agreement or the other Transaction Documents towhich it is a party and the consummation of the transactions contemplated hereby and thereby. This Agreement and all otherTransaction Documents to which Buyer is a party have been duly executed and delivered by Buyer and constitute the valid andbinding agreements of Buyer enforceable against Buyer in accordance with their terms (subject to applicable bankruptcy, insolvency,reorganization, moratorium or other laws affecting generally the enforcement of creditors’ rights and subject to general principles ofequity).6.3No ConflictsThe execution, delivery and performance of this Agreement and the other Transaction Documents and theconsummation of the transactions contemplated hereby and thereby by Buyer do not and shall not (a) conflict with or result in anybreach of any of the terms, conditions or provisions of, (b) constitute a default under, (c) result in a violation of, (d) give any third partythe right to modify, terminate or accelerate or cause the modification, termination or acceleration of, any obligation under, (e) result inthe creation of any Lien upon the assets of Buyer, or (f) require any authorization, consent, approval, exemption or other action by ornotice or declaration to, or filing with, any court or administrative or other governmental body or agency, under (i) the provisions of theformation or organizational documents of Buyer, (ii) any contract to which Buyer is bound or affected, (iii) any law, statute, rule orregulation to which Buyer is subject or (iv) any judgment, order or decree to which Buyer is subject.6.4Governmental Authorities and ConsentsOther than in connection with or in compliance with Hart-Scott-Rodino Antitrust Improvements Act of 1976 (asamended, the “HSR Act”) or any other approvals set forth on Schedule 6.4, (i) Buyer is not required to submit any notice, report orother filing with any governmental authority in connection with the execution or delivery by it of this Agreement and the otherTransaction Documents to which it is a party or the consummation of the transactions contemplated hereby or thereby, and (ii) noconsent, approval or authorization of any governmental or regulatory authority is required to be obtained by Buyer in connection withits execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party or thetransactions contemplated hereby or thereby.6.5LitigationThere are no actions, suits, proceedings or orders pending or, to Buyer’s knowledge, threatened against oraffecting Buyer at law or in equity, or before or by any federal, state, municipal or other governmental department, commission, board,bureau, agency or instrumentality, domestic or foreign, which would adversely affect the performance of Buyer under this Agreementand the other Transaction Documents to which Buyer is a party or the consummation of the transactions contemplated hereby orthereby.6.6Brokerage39There are no claims for brokerage commissions, finders’ fees or similar compensation in connection with thetransactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of Buyer.6.7Financial Ability to Perform; Solvency(a)Buyer will have at the Closing, available cash funds, credit facilities or other sources of immediatelyavailable funds sufficient to consummate the transactions contemplated by this Agreement. Buyer’s obligations toconsummate the transactions contemplated by this Agreement are not subject to any financing condition (whether pursuantto the Debt Financing or otherwise).(b)Buyer has delivered to the Seller a true, correct and complete copy of the executed commitment letter(including all exhibits, schedules and amendments thereto), dated November 3, 2017 (the “Debt Commitment Letter”),among Buyer and Merrill Lynch, Pierce, Fenner & Smith Incorporated, SunTrust Robinson Humphrey, Inc., SG AmericasSecurities, LLC, Bank of America, N.A., SunTrust Bank and Societe Generale, pursuant to which such parties have agreedand committed to provide financing to Buyer on the terms and conditions set forth therein on or prior to the Closing Date(the “Debt Financing”). There are no side letters or other agreements related to the funding of the Debt Financing other thanthe Debt Commitment Letter and the fee letter related thereto (a true, correct and complete copy of which has been providedto the Seller, except that financial and economic terms not affecting conditionality have been redacted). As of the datehereof, the Debt Commitment Letter is (a) is the valid, binding and enforceable obligation of Buyer and, to the knowledge ofBuyer, the other parties thereto and, to the knowledge of the Buyer, is in full force and effect, and (b) has not been amended,restated or otherwise modified or waived. As of the date hereof, the commitments contained in the Debt Commitment Letterhave not been withdrawn, modified or rescinded in any respect. There are no conditions precedent to the funding of the fullamount of the Debt Financing, other than as expressly set forth in the Debt Commitment Letter. Buyer has fully paid all feesrequired to be paid prior to the date of this Agreement pursuant to the Debt Commitment Letter. Assuming the accuracy ofthe Company’s and Seller’s representations and warranties hereunder, as of the date hereof, to the knowledge of Buyer, noevent has occurred which, with or without notice, lapse of time or both, would or would reasonably be expected to constitutea default or breach on the part of Buyer or, any other parties thereto, under the Debt Commitment Letter. Assuming theaccuracy of the Company’s representations and warranties hereunder, as of the date hereof, Buyer does not have any reasonto believe that any of the conditions to the Debt Financing will not be satisfied or that the Debt Financing will not beavailable to Buyer on the Closing Date.(c)Immediately after giving effect to the transactions contemplated by this Agreement and the closing ofany financing by Buyer in connection herewith (including the Debt Financing), and assuming the accuracy of therepresentations and warranties of the Seller and the Company contained herein, (i) the present fair saleable value of theproperty of Buyer Guarantor and its Subsidiaries on a consolidated and going concern basis will be greater than the amountthat will be required to pay the probable Liabilities of Buyer Guarantor and its Subsidiaries on a consolidated basis as theybecome absolute and40matured; (ii) Buyer Guarantor and its Subsidiaries on a consolidated basis do not intend to, and do not believe that they will,incur debts or liabilities beyond their ability to pay as such debts and liabilities mature; and (iii) Buyer Guarantor and itsSubsidiaries on a consolidated basis are not engaged in business or a transaction, and are not about to engage in business or atransaction, for which Buyer Guarantor and its Subsidiaries’ property on a consolidated basis would constitute unreasonablysmall capital.6.8Investigation by BuyerBuyer acknowledges that it and its Affiliates have: (a) had an opportunity to discuss the business, managementand financial affairs of the Company Group with officers of the Company Group, and (b) conducted their own independentinvestigation of the Company Group.6.9No RelianceBuyer hereby acknowledges and agrees to the statements set forth in Section 4.28 and Section 5.7, and that: (i)Buyer is not relying on any representations, warranties, statements or omissions of the Seller, the Company Group, or any of theirrespective Affiliates or representatives, other than the representations and warranties of the Seller and the Company expressly set forthin this Agreement or in any other Transaction Document to which the Seller is a party; and (ii) except to the extent specifically set forthin this Agreement and any other Transaction Document to which the Seller or the Company is a party, the Buyer is purchasing theShares on an “as-is, where-is” basis. In connection with Buyer’s investigation of the Company Group, Buyer acknowledges thatBuyer or Buyer’s representatives have received from or on behalf of the Company Group certain projections, including projectedstatements of operating revenues and income from operations of the Company Group and certain business plan information. Buyerfurther acknowledges that there are uncertainties inherent in attempting to make such estimates, projections and other forecasts andplans, that Buyer is familiar with such uncertainties, that Buyer is taking full responsibility for making its own evaluation of theadequacy and accuracy of all estimates, projections and other forecasts and plans so furnished to it (including the reasonableness of theassumptions underlying such estimates, projections and forecasts) and that Buyer shall have no claim against the Seller, the CompanyGroup, or any of their respective Affiliates or representatives with respect thereto. Buyer further acknowledges that neither the Seller,the Company Group, nor any of their respective Affiliates or representatives makes or has made, and that each of them disclaims, anyrepresentations or warranties whatsoever with respect to such estimates, projections and other forecasts and plans (including thereasonableness of the assumptions underlying such estimates, projections and forecasts).ARTICLE VII CLOSING CONDITIONS; TERMINATION7.1Conditions to Obligations of BuyerThe obligation of Buyer under this Agreement to consummate the transactions contemplated hereby is subject tosatisfaction of the following conditions as of the Closing:(a)Representations and Warranties and Covenants. (i) The Fundamental Representations shall be true andcorrect in all but de minimis respects as of the Closing41Date as though then made (except with respect to those of such representations and warranties which speak as to a particulardate, which representations and warranties shall be so true and correct at and as of such date), and (ii) the otherrepresentations and warranties set forth in Article IV and Article V shall be true and correct in all material respects (withoutgiving effect to any “Material Adverse Effect” or other materiality qualifications therein (except Section 4.6 and Section4.8(a)) as of the Closing Date as though then made (except with respect to those of such representations and warrantieswhich speak as to a particular date, which representations and warranties shall be so true and correct at and as of suchdate). The Company shall have performed and complied with in all material respects all of its covenants and agreementsrequired to be performed or complied with by it under this Agreement prior to the Closing Date.(b)Absence of Material Adverse Change. From and after the date of this Agreement, there shall not haveoccurred a Material Adverse Effect.(c)Absence of Litigation. There shall not be (i) in force any injunction, writ or order of any nature issuedby any Governmental Authority directing that the transactions provided for herein not be consummated as herein provided or(ii) any Action, pending or threatened, before any Governmental Authority with respect to the transactions contemplatedhereby.(d)Closing Deliveries. On or prior to the Closing, the Company and the Seller shall have delivered, orcaused to be delivered, to Buyer the deliverables under Section 3.1.(e)Regulatory Approvals. All waiting periods (and any extensions thereof) applicable to the transactionscontemplated by this Agreement under the HSR Act or any other antitrust laws shall have been terminated or shall haveexpired. All regulatory consents and approvals set forth on Schedule 7.1(e) shall have been obtained.(f)Third Party Consents. The Company and the Seller will have obtained (on terms reasonably satisfactoryto Buyer) and delivered to Buyer all third-party consents and approvals set forth on Schedule 7.1(f).(g)Real Property Holding Corporation Affidavit. The Company shall deliver an affidavit and notice of theCompany that meets the requirements of Treasury Regulation Section 1.897-2(h), dated within 30 days prior to the ClosingDate and in form and substance reasonably acceptable to Buyer along with written authorization for Buyer to deliver suchnotice form to the Internal Revenue Service on behalf of the Company upon Closing.7.2Conditions to Obligations of the Company and the SellerThe obligation of the Company and the Seller under this Agreement to consummate the transactions contemplatedhereby is subject to the satisfaction of the following conditions as of the Closing:(a)Representations and Warranties and Covenants. The representations and warranties set forth in ArticleVI shall be true and correct in all material respects as of the42Closing Date as though then made (except with respect to those of such representations and warranties which speak as to aparticular date, which representations and warranties shall be so true and correct in all respects at and as of such date), exceptas would not prevent Buyer from consummating the transactions contemplated by this Agreement. Buyer shall haveperformed and complied with in all material respects all of its covenants and agreements required to be performed orcomplied with by it under this Agreement prior to or at the Closing.(b)Absence of Litigation. There shall not be (i) in force any injunction, writ or order of any nature issuedby any Governmental Authority directing that the transactions provided for herein not be consummated as herein provided or(ii) any Action pending or threatened before any court or Governmental Authority with respect to the transactionscontemplated hereby.(c)Closing Deliveries. On or prior to the Closing, Buyer shall have delivered, or caused to be delivered, tothe Company the deliverables required under Section 3.2.(d)Regulatory Approvals. All waiting periods (and any extensions thereof) applicable to the transactionscontemplated hereby under the HSR Act or any other antitrust laws shall have been terminated or shall have expired. Allregulatory consents and approvals set forth on Schedule 7.2(d) shall have been obtained.7.3Termination(a)This Agreement may be terminated at any time prior to the Closing only as follows:(i)by mutual written consent of each of Seller, Buyer and the Company;(ii)by written notice by either Buyer, on the one hand, or the Seller or the Company, on theother hand, in either case if there has been a material breach of warranty or material breach of covenant on the partof the Company or the Seller (in the case of termination by Buyer) or Buyer (in the case of termination by theSeller or the Company) in the representations and warranties or covenants of such Party set forth in thisAgreement, in each case, such that the conditions set forth in Section 7.1 (in the case of termination by Buyer) orSection 7.2 (in the case of termination by the Seller or the Company), as the case may be, could not be satisfied asof the Closing (but only if and so long as the Party seeking to terminate this Agreement under this Section 7.3(a)(ii) is not then in breach of this Agreement in any material respect, and (B) has provided written notice of suchmaterial breach and such material breach has continued without cure for twenty (20) days after such notice ofbreach has been delivered);(iii)by either Buyer, on the one hand, or the Company or the Seller, on the other hand, in eithercase by delivery of written notice of termination to the other Parties prior to the Closing, if the Closing has notoccurred by the date that is ninety (90) days after the date of this Agreement (the “Termination Date”);43provided, however, that the right to terminate this Agreement pursuant to this clause (iii) shall not be available toany party whose failure to perform or comply with any of the covenants, agreements or conditions hereof to beperformed or complied with by it prior to the Closing was the primary cause of the failure to close on or before theTermination Date; or(iv)by either Buyer, on the one hand, or the Company or the Seller, on the other hand, in eithercase by delivery of written notice of termination to the other Parties prior to the Closing, if the consummation ofthe transactions contemplated hereby is permanently enjoined or prohibited by the terms of a final, non-appealableruling, award, decision, determination, injunction, judgment, order, decree or subpoena entered, promulgated,issued or made by any Governmental Authority of competent jurisdiction.(b)In the event of termination of this Agreement as provided in Section 7.3(a) hereof, this Agreement willforthwith become void and there will be no Liability or other obligation hereunder or under any of the other agreements andinstruments contemplated hereby on the part of any of Buyer, the Company, the Seller, or any of their respective Affiliates,except that the provisions of this Section 7.3, Section 10.5, Section 10.6 and Article XI hereof will survive any suchtermination and except as expressly provided in the following sentence. If this Agreement is terminated pursuant to Section7.3(a)(ii) or (iii), such termination will not relieve or release any Party from any liability to the other Party for (A) ActualFraud in the making of the representations and warranties herein, (B) any willful breach of covenants or agreements set forthin this Agreement (other than Section 6.7 or Section 8.9) occurring prior to such termination or (C) any breach by the BuyerParties of Section 6.7 or Section 8.9 prior to such termination (the “Surviving Liabilities”), and the provisions of thisAgreement shall survive such termination to the extent required so that each Party may enforce all rights and remediesavailable to such Party hereunder or under applicable Laws in respect of such Surviving Liabilities so that any Partyresponsible for any such Surviving Liabilities shall remain liable for the consequences thereof.(c)Each Party shall be deemed to have waived its rights to terminate this Agreement followingconsummation of the transactions contemplated hereby.ARTICLE VIII COVENANTS PRIOR TO CLOSING8.1Affirmative CovenantsFrom the date hereof to the Closing (the “Interim Period”), except as (1) otherwise expressly required by thisAgreement, (2) required by applicable Law, (3) set forth on Schedule 8.1 or (4) otherwise consented to in writing by Buyer (whichconsent shall not be unreasonably withheld, conditioned or delayed), (x) the Company shall, and the Seller shall cause the Companyto, and the Seller and the Company shall cause the Subsidiaries of the Company to, use commercially reasonable efforts to carry on theBusiness in the Ordinary Course of Business, and (y) without limiting the generality of the foregoing, the Company shall, and theSeller shall cause the Company to, and the Seller and the Company shall cause the Subsidiaries of the Company to:44(a)use commercially reasonable effects to conduct the Company Group’s cash management customs andpractices (including the collection of receivables and payment of payables) and billing, marketing, sales and discountpractices in the Ordinary Course of Business of the Company Group, and use commercially reasonable efforts to keep theCompany Group’s business organization, properties, assets and business relationships intact;(b)cooperate with Buyer in Buyer’s investigation of the Business as Buyer may reasonably request andprovide Buyer with reasonable access at reasonable times and upon reasonable notice, to the offices, properties, seniormanagement and books and records of the Company Group that Buyer may reasonably request, in each case, to the extentthe Company Group is permitted to do so under applicable Law, and without prejudicing attorney-client or similar privilegeor attorney work product protection; provided that (x) such access shall not unreasonably interfere with the operations of theCompany Group (and shall otherwise be subject to the Company’s security measures and insurance requirements and shallnot unreasonably interfere with the operations of the Company). All requests for such access or information shall be directedto such Persons as the Company may designate in writing from time to time (collectively, the “Designated Contacts”). Otherthan the Designated Contacts, none of Buyer nor any of its representatives shall contact any employee, customer, supplier,landlord or other material business relation of the Company Group without the prior written consent of the Company (exceptin the ordinary course of Buyer’s business consistent with past practice, but in any event, not in relation to the CompanyGroup (except in the course of its relationship as a customer of the Company Group) or the transactions contemplatedhereby);(c)furnish promptly to Buyer, and in any event at least five (5) business days prior to the Closing Date (tothe extent requested at least eight days prior to the Closing Date), all documentation and other information regarding theSeller and the Company Group required under applicable “know your customer” and anti-money laundering rules andregulations, including the PATRIOT Act;(d)maintain the existence of and use commercially reasonable efforts to protect all material ProprietaryRights owned or used by the Company Group;(e)use commercially reasonable efforts to cause the conditions to Buyer’s obligation to close to be satisfied;(f)use commercially reasonable efforts to do all things necessary and proper to consummate thetransactions contemplated by this Agreement, as soon as practicable, including obtaining third party consents; and(g)promptly deliver to Buyer written notices (to the extent permitted to do so under applicable Law), uponbecoming aware of (A) any fact, change, condition, circumstance, event, occurrence or non-occurrence that has caused anyrepresentation or warranty in this Agreement made by the Company or the Seller to be untrue or inaccurate in any materialrespect at any time after the date hereof and prior to the Closing, (B) any material failure on the part of the Company or theSeller to comply with or satisfy any45covenant, condition or agreement to be complied with or satisfied by it hereunder, or (C) (1) any injunction, writ or order ofany nature issued and directing that the transactions provided for herein not be consummated as herein provided or (2) anyAction pending or threatened before any Governmental Authority with respect to the transactions contemplated hereby;provided that the delivery of any notice pursuant to this Section 8.1(g) shall not limit or otherwise affect the remediesavailable hereunder to Buyer, or the representations or warranties of, or the conditions to the obligations of, the Parties;provided, further, if Buyer has the right to, but does not elect to, terminate this Agreement within five (5) Business Days ofits receipt of any such written notice, then Buyer shall be deemed to have irrevocably waived its right to terminate thisAgreement with respect to such matter.8.2Negative CovenantsDuring the Interim Period, except as (1) otherwise expressly required herein, (2) required by applicable Law, (3)set forth on Schedule 8.2 or (4) otherwise consented to in writing by Buyer (which shall not be unreasonable withheld, conditioned ordelayed), the Company shall not, with respect to the Company Group:(a)take any action or omit to take any action that would require disclosure under Section 4.5 hereof(without giving effect to any “date hereof” qualification set forth therein) as of the Closing Date;(b)hire or otherwise enter into or amend any employment or consulting agreement or arrangement with anyPerson whose cash compensation would exceed, on an annualized basis, $100,000;(c)except as required by the terms of any Employee Benefit Plan or Contract set forth on Schedule 8.2(c)or any applicable Law or this Agreement, (A) modify or increase the compensation or benefits payable to any of itsexecutives or senior managers or (B) modify or increase the compensation or benefits payable to any of its other employees(other than in the Ordinary Course of Business of the Company Group), (C) enter into or amend any Contract providing for,making or granting any transaction, stay-on or retention bonus or severance or termination pay to any director, officer,employee, consultant or other individual service provider, other than to employees with an annual base salary of less than$100,000 per year in an aggregate amount not to exceed $100,000, and only to the extent the foregoing constitutes aTransaction Expense hereunder, (D) enter into or amend any Employee Benefit Plan, program, policy or Contract, except asrequired by Law, (E) accelerate the payment, funding, right to payment or vesting of any compensation or benefits, or(F) terminate the employment or service of any employee of the Company Group (other than terminations for cause or due topermanent disability);(d)implement any employee layoffs that could reasonably be expected to implicate the WARN Act;(e)take any action or omit to take any action, the taking or omission of which, would reasonably beexpected to have a Material Adverse Effect;46(f)(A) enter into or amend any Contract restricting in any way the conduct of the business of any memberof the Company Group, or, (B) enter into any Contract with any officer, director, equityholder or Affiliate of the CompanyGroup, or (C) incur any Indebtedness, outside of the Ordinary Course of Business;(g)settle or compromise any material Action or threatened material Action;(h)enter into, materially amend or modify, or terminate any agreement that would be a Material Contract ifsuch agreement were in effect as of the date of this Agreement;(i)fail to continue planned marketing in the Ordinary Course of Business;(j)(A) make any material adverse change in the types, nature, composition or quality of the products orservices sold, leased or delivered by the Company Group, (B) make any material change in product specifications or pricesor terms of distribution of the products, (C) make any material change in pricing, discount, allowance, warranty, refund orreturn policies or practices, (D) grant any material pricing, discount, allowance or return terms for any customer or vendornot in accordance with such policies and prior terms for such customer or vendor, including by materially modifying themanner in which the Company Group licenses or otherwise distributes its products or making any material change in theproportion of fully paid-up and subscription-based licenses granted to customers or (E) make any change in standard billingor collection procedures or practices, including any modification to the practice of billing customers annually for theapplicable annual amount for any multi-year revenues, except, with respect to each of the foregoing clauses (A) through (E),in the Ordinary Course of Business;(k)make or change any election with respect to material Taxes, adopt or change any material Taxaccounting method, amend any material Tax Return, enter into any closing agreement related to any income or other materialTaxes, settle any income or other material Tax claim or assessment, consent to any extension or waiver of the limitationperiod applicable to any Tax claim or assessment, or surrender any right to claim a Tax refund;(l)(A) delay or postpone the payment of accounts payable or accrued expenses outside the OrdinaryCourse of Business, (B) accelerate the collection of, or discounting, accounts receivable outside the Ordinary Course ofBusiness, (C) change cash management policies, (D) engage in any discounts or price reductions or alter the extension ofcredit terms to any customer, in each case outside of the Ordinary Course of Business, or (E) otherwise knowingly andintentionally engage in any activity that has the effect of accelerating to earlier periods sales or the collection of accounts ornotes receivable that otherwise would be expected to occur in subsequent periods, other than in the Ordinary Course ofBusiness;(m)disclose any of the Company Group’s trade secrets to any third party, other than pursuant toconfidentiality agreements;47(n)enter into any Contract that obligates the Company Group to develop any Proprietary Rights for anythird party;(o)license any Proprietary Rights, except for non-exclusive licenses granted to customers in the OrdinaryCourse of Business; or(p)enter into any Contract to do anything prohibited by this Section 8.2.8.3ExclusivityThe Company and the Seller agree that, during the Interim Period, on behalf of themselves and their Affiliates,neither they nor any of their respective officers, directors, employees, stockholders, partners, members, agents, financial advisors,consultants, attorneys, accountants, representatives or other advisors will, directly or indirectly (i) solicit, initiate, knowingly facilitate orencourage the submission of any Acquisition Proposal or accept any such Acquisition Proposal; (ii) participate in any discussions,negotiations or other communications (as a sender thereof) regarding, or furnish to any Person any information with respect to, or takeany other action to knowingly facilitate or encourage any inquiries or the making of any proposal that constitutes, or could reasonablybe expected to lead to, any Acquisition Proposal (except to provide notice of the existence of these provisions), or otherwiseknowingly cooperate in any way, knowingly assist or knowingly participate in, knowingly facilitate or knowingly encourage any effortor attempt by any other Person to seek to do any of the foregoing; or (iii) enter into any agreement with respect to any AcquisitionProposal. Immediately following the execution and delivery of this Agreement, the Company shall, and the Company shall cause itsand its Subsidiaries’ respective officers, directors, employees, agents, financial advisors, consultants, attorneys, accountants,representatives or other advisors to, cease and cause to be terminated all existing discussions, negotiations and other communicationswith any Persons conducted heretofore with respect to any of the foregoing. If any Person, whether in his or her capacity as arepresentative of the Company or the Seller, takes any action that the Company is obligated pursuant to this Section 8.3 to cause suchPerson not to take, then the Company shall be deemed for all purposes of this Agreement to have breached this Section 8.3. TheCompany and the Seller shall, as promptly as practicable, notify Buyer if any other proposals or offers, or any expressions of interestfor the Company are made, including the terms and conditions of such inquiry or proposal (unless such disclosure is prohibited by aconfidentiality agreement executed prior to the date hereof). The Company shall not release any third party from, or waive anyprovision of, any confidentiality or standstill agreement to which it is a party.8.4Monthly Financial StatementsDuring the Interim Period, the Company shall promptly (but in no event later than the 30th day following the endof each month ended after the Latest Balance Sheet Date) deliver to Buyer copies of the Company Group’s monthly financialstatements (as prepared in the Ordinary Course of Business consistent with past practice for internal use) as they are finalized duringthe Interim Period (the “Monthly Financial Statements”). The Monthly Financial Statements shall be prepared in a manner consistentwith the Company’s Latest Balance Sheet, and shall be consistent in all material respects with the books and records of the CompanyGroup, and shall fairly present, in all material respects, the Company’s consolidated balance sheets and the related consolidated48statements of operations, stockholders’ equity (deficit) and cash flows for the fiscal periods then ended, and the related notes to thefinancial statements; provided that such Monthly Financial Statements shall not include customary footnotes or other year-end auditadjustments (none of which, alone or in the aggregate, are material) and shall be prepared consistently and in accordance with theAccounting Policies and Principles, consistently applied.8.5Antitrust Filings(a)Buyer (and its Affiliates, if applicable), on the one hand, and the Company, on the other hand, will,(1) file, or cause to be filed, with the United States Federal Trade Commission (“FTC”) and the Antitrust Division of theUnited States Department of Justice (“DOJ”) a Notification and Report Form relating to this Agreement and the transactionscontemplated by this Agreement as required by the HSR Act within ten (10) Business Days following the date of thisAgreement (such filings shall specifically request early termination of the waiting period, and Buyer shall be responsible forone hundred percent (100%) of the filing fee payable under the HSR Act); and (2) promptly file comparable pre-transactionnotification filings, forms and submissions with any Governmental Authority that are required by other applicable antitrustlaws in connection with the transactions contemplated by this Agreement (with any comparable pre-transaction filings to bemade as soon as reasonably practicable following the date of this Agreement and Buyer shall be responsible for one hundredpercent (100%) of the filing fee payable with respect to such filing). Each of Buyer and the Company will (A) cooperateand coordinate (and cause its respective Affiliates to cooperate and coordinate) with the other in the making of such filings;(B) supply the other (or cause the other to be supplied) with any information or documents that may be required in order tomake such filings, provided that insofar as any such information or documents are competitively sensitive, such informationor documents may be provided directly to the relevant Governmental Authorities or, if required, on an outside counsel-to-counsel, in each case on a strictly confidential basis; (C) supply (or cause the other to be supplied) any additional informationthat reasonably may be required or requested by the FTC, the DOJ or the Governmental Authorities of any other applicablejurisdiction in which any such filing is made; and (D) use their reasonable best efforts to (1) cause the expiration ortermination of the applicable waiting periods pursuant to the HSR Act and any other antitrust laws applicable to thetransactions contemplated by this Agreement; and (2) obtain any required consents pursuant to any antitrust laws applicableto the transactions contemplated by this Agreement as soon as practicable. Buyer (and its Affiliates, if applicable), on theone hand, and the Company (and its Affiliates), on the other hand, will promptly inform the other party of any materialcommunication from any Governmental Authority regarding the transactions contemplated by this Agreement in connectionwith such filings. If any Party or Affiliate thereof receives a request for additional information or documentary material fromany Governmental Authority with respect to the transactions contemplated by this Agreement pursuant to the HSR Act orany other antitrust laws applicable to the transactions contemplated by this Agreement, then such Party will make (or causeto be made), as soon as reasonably practicable and after consultation with the other Parties, an appropriate response to suchrequest. Notwithstanding anything to the contrary in this Section 8.6, materials provided to the other party or its outsidelegal counsel may be redacted as necessary (i) to address49good faith legal privilege or confidentiality concerns, (ii) to comply with applicable Law and (iii) to remove any informationrelating to Company valuation.(b)Without limiting the generality of the Parties’ undertaking pursuant to Section 8.5(a), each Party agreesto use its reasonable best efforts to avoid or eliminate impediments under any antitrust, competition or trade regulation Lawthat may be asserted by any Governmental Authority so as to enable the Parties to expeditiously consummate thetransactions contemplated by this Agreement no later than the Termination Date.8.6Directors and Officers Indemnification and Insurance(a)Buyer shall, and shall cause the Company (following the Closing) and each of its Subsidiaries to, fulfilland honor the obligations of the Company and each of its Subsidiaries to any individual who at any time prior to the Closingwas a director or officer of the Company or any of its Subsidiaries (each, an “D&O Indemnitee” and, collectively, the “D&OIndemnitees”) pursuant to any indemnification provisions under the articles of organization, bylaws, certificate of formationor operating agreement (or any similar organizational documents) (“Governing Documents”) of any member of theCompany Group as in effect immediately prior to the date hereof; provided that to the extent that any amounts paid by theCompany Group under this Section 8.6(a) in connection with any claim brought by Buyer are based on any facts orcircumstances that form the basis for an indemnification claim by Buyer under Article IX for which the Seller is determinedto be liable in accordance with Article IX, such amounts shall be deemed to be a Loss for which the Buyer may be entitledto indemnification subject to and in accordance with Article IX. From and after the Closing Date, except as required byapplicable Law, Buyer shall cause the Company (following the Closing) and each of its Subsidiaries to maintain provisionswith respect to indemnification and exculpation from liability that are no less favorable than those set forth in the GoverningDocuments of the Company Group as of immediately prior to the date hereof, which provisions shall not be amended,repealed or otherwise modified during such period in any manner that would adversely affect such indemnification rightsthereunder of any D&O Indemnitee.(b)For six (6) years after the Closing Date, Buyer shall, or shall cause the Company (following theClosing) to, maintain in effect the Company Group’s current directors’ and officers’ liability insurance or a “tail” insurancepolicy from an insurance carrier with the same or better credit rating as the Company Group’s current insurance carrier onterms at least as favorable as the Company Group’s current directors’ and officers’ liability insurance for the six (6) yearperiod following the Closing, in each case covering such acts or omissions occurring at or prior to the Closing Date withrespect to the D&O Indemnitees (and including in connection with the transactions contemplated by this Agreement), onterms and scope with respect to such coverage, and in amount, at least as favorable to those of such policy in effect on thedate of this Agreement. Without limiting the foregoing, prior to the Closing Date, the Company shall purchase, at theCompany’s expense, “tail” coverage for the six-year period following the Closing under the directors’ and officers’ liabilityinsurance policies of the Company Group to be in place prior to the Closing Date with respect to matters existing oroccurring at or prior to the Closing Date that provides coverage no less favorable in scope and amount to the coverage50provided by such policies at such time (the “D&O Tail”). The D&O Tail shall provide that the D&O Tail shall be theinsurer of first resort with respect to the D&O Indemnitees (i.e., its obligations to the D&O Indemnitees are primary and anyduplicative, overlapping or corresponding obligations of the Company Group are secondary) and that the D&O Indemniteesshall not be required to seek indemnification from the Company Group prior to making a claim against the D&O Tail. Thecosts of the D&O Tail will be a Transaction Expense payable at Closing to the extent such costs are not paid prior toClosing.(c)This Section 8.6(c) (A) shall survive the Closing, (B) is intended to benefit and may be enforced by theCompany, Buyer and the D&O Indemnitees, and any heir of the D&O Indemnitees, and (C) shall be binding on allsuccessors and assigns of Buyer and the Company (following the Closing). The respective obligations of Buyer and theCompany (following the Closing) under this Section 8.6(c) shall not be terminated or modified in such a manner as toadversely affect the rights of any D&O Indemnitee to whom this Section 8.6(c) applies unless (x) such termination ormodification is required by applicable Law (and then only to the extent so required) or (y) the affected D&O Indemniteeshall have consented in writing to such termination or modification (it being expressly agreed that the D&O Indemnitees towhom this Section 8.6(c) applies shall be third-party beneficiaries of this Section 8.6(c)).(d)In the event that Buyer, the Company (following the Closing) or any of their respective successors orassigns (i) consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity ofsuch consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then,and in each such case, proper provision shall be made so that the successors and assigns of Buyer and the Company(following the Closing) or the transferee of such properties and assets shall expressly assume and be responsible for all of theobligations thereof set forth in this Section 8.6(d).8.7R&W Policy(a)The Buyer Parties shall pay all of the R&W Policy Expenses. The R&W Policy shall contain a waiverof subrogation rights against the Seller for the benefit of the Seller, other than in the case of Actual Fraud by such Seller inthe making of the representations and warranties in this Agreement and shall not contain any other Liability on the part of theSeller. The Buyer’s only recourse for breaches of the representations and warranties set forth in Article IV (other than withrespect to breaches of Fundamental Representations or in the event of Actual Fraud in the making of the representations andwarranties in this Agreement) shall be, and shall not exceed, the Indemnity Escrow Amount, subject to and in accordancewith Article IX.(b)Without the prior written consent of the Seller (which consent shall not be unreasonably withheld,conditioned or delayed), Buyer shall not modify or amend any material provision in the R&W Policy regarding waiver ofsubrogation against Seller or in any other manner that will have an adverse effect on the Seller.51(c)(i) Promptly following Buyer obtaining a conditional binder to the R&W Policy, Buyer shall providethe Seller with a complete copy of such conditional binder and (ii) promptly following binding of coverage by Buyer for theR&W Policy, Buyer shall provide the Seller with evidence of such binding.8.8280G CooperationThe Seller will, prior to the Closing Date, provide stockholder approval under the requirements ofSection 280G(b)(5)(B) of the Code and the Treasury Regulations promulgated pursuant thereto (including seeking to obtain anynecessary waiver from any affected individual) with respect to any payments that might otherwise be excess parachute payments sothat, if stockholder approval is received, payments by the Company or its Subsidiaries to any disqualified individuals of the Companyor its Subsidiaries arising in whole or in part as a result of the transactions contemplated by this Agreement based on arrangements inplace at the Closing will not reasonably be expected to constitute parachute payments under Section 280G of the Code. At least three(3) Business Days prior to taking such actions, the Seller shall deliver to Buyer for advance review and comment (which review andcomment shall not be unreasonably conditioned, withheld or delayed) copies of any documents or agreements necessary to effect thisSection 8.8, including any stockholder consent form, disclosure statement or waiver and the applicable calculations performed by theCompany’s advisors.8.9Debt Financing(a)Buyer Parties shall use their respective reasonable best efforts to take, or cause to be taken, all actionsand to do, or cause to be done, all things necessary, proper or advisable to consummate the Debt Financing on the terms andsubject to the conditions described in the Debt Commitment Letter, including (i) maintaining in effect the Debt CommitmentLetter until the transactions contemplated by this Agreement are consummated, (ii) satisfying all conditions applicable to it inthe Debt Commitment Letter, (iii) entering into definitive agreements with respect thereto on the terms and conditionsconsistent in all material respects with the terms and conditions contemplated by the Debt Commitment Letter (or on termsno less favorable (taken as a whole) to the Buyer Parties with respect to conditionality and the aggregate amount of the DebtFinancing), subject to any amendments or modifications thereto permitted by this Section 8.9, and (iv) enforcing theirrespective rights under the Debt Letter Commitment in the event of a breach or purported breach thereof.(b)The Debt Commitment Letter may be amended, restated, supplemented or otherwise modified orsuperseded (i) to add or replace one or more lenders, (ii) to increase the amount of indebtedness or otherwise replace one ormore facilities with one or more new facilities or modify one or more facilities to replace or otherwise modify the DebtCommitment Letter, or (iii) in any manner not prohibited by this Section 8.9(b), provided, that such new Debt CommitmentLetter shall not (x) amend the conditions to the Debt Financing so as to adversely impact the ability of Buyer Parties totimely consummate the transactions contemplated hereby on the Closing Date or the likelihood of consummation of thetransactions contemplated hereby or to delay or prevent the Closing Date; (y) reduce the aggregate amount of available DebtFinancing below an amount sufficient to52consummate the transactions contemplated by this Agreement (unless, in the case of this clause (y), such amount is replacedwith one or more new debt facilities pursuant to new debt commitment letters on terms no less favorable in any materialrespect to the Buyer Parties than the terms set forth in the Debt Commitment Letter) or (z) materially prevent, delay or impairthe availability of financing under the Debt Commitment Letter on the Closing Date.(c)If any portion of the Debt Financing becomes unavailable on the express terms and conditionscontemplated in the Debt Commitment Letter, Buyer Parties shall use their respective reasonable best efforts to arrange andobtain alternative financing from alternative sources in an amount sufficient to consummate the transactions contemplated bythis Agreement as promptly as practicable following the occurrence of such event.(d)The Company and the Seller (and their respective representatives, including legal and accounting) shall,and the Seller shall cause the Company to, and the Seller and the Company shall cause the Subsidiaries of the Company to,at Buyer Parties’ sole expense, provide such cooperation as is reasonably necessary in connection with the arrangement ofthe Debt Financing as may be reasonably requested by Buyer, including: (A) providing Buyer from time to time informationregarding the Company Group reasonably requested by the lenders providing the Debt Financing, including, providingreasonable access to such lenders and their advisors to the officers, properties, senior management, books and records andcontracts of the Company Group at reasonable times and upon reasonable notice, (B) providing reasonable assistance withthe preparation and negotiation of, and facilitating the execution and delivery by the appropriate officers of the CompanyGroup of, loan agreements, pledge and security documents and other customary definitive documents and/or certificates(including a solvency certificate) in connection with the Debt Financing (such documents, collectively, the “FinancingDocuments”) and making senior management of the Company reasonably available for meetings so long as the foregoingdoes not unreasonably interfere with the conduct of the Company’s business; provided that such signatures, for theavoidance of doubt, shall not be effective prior to the consummation of the transactions contemplated hereby, (C) providingreasonable assistance with the completion of schedules and other information disclosures reasonably requested by Buyer(including in connection with the Financing Documents), (D) obtaining the Payoff Letters in a form reasonably satisfactoryto Buyer and the Debt Financing Sources, (E) as of the Closing Date, taking all corporate actions reasonably requested byBuyer to authorize the consummation of the Debt Financing, (F) facilitating the pledge of the collateral for the DebtFinancing Sources, in each case, to the extent the Company Group is not prohibited from doing so under applicable Law;provided that such pledge, for the avoidance of doubt, shall not be effective prior to the consummation of the transactionscontemplated hereby; provided, further, that such access shall not unreasonably interfere with the operations of the CompanyGroup, and (G) providing all such other reasonable assistance as necessary in order for Buyer to satisfy the conditions to theconsummation of the Debt Financing or in order to satisfy Buyer’s obligations under the Debt Commitment Letter or theFinancing Documents; provided, however, that all of the foregoing agreements, documents and/or certificates shall bedeemed to have been executed and delivered in favor of Buyer (and the Company Group as owned by Buyer) without anyLiability whatsoever of the Seller with respect thereto.53(e)Buyer shall keep the Seller reasonably informed of material developments relating to the DebtFinancing and, if reasonably requested in writing by the Seller, on the status of Buyer’s efforts relating thereto. Withoutlimiting the generality of the foregoing, Buyer shall promptly notify the Seller in writing of (i) the receipt of (A) any writtennotice or (B) other written communication, in each case from any Debt Financing Source with respect to any materialbreach, material default, termination or repudiation by any party to any of the Debt Commitment Letter or other materialagreements related to the Debt Financing, (ii) any material dispute or disagreement between or among parties to any of theDebt Commitment Letter with respect to the obligation to fund the Debt Financing or the amount of the Debt Financing tobe funded at the Closing and (iii) if at any time for any reason Buyer believes in good faith that it will not be able to timelyobtain all or any portion of the Debt Financing on the terms and conditions contemplated by the Debt Commitment Letter;provided, that in no event will the Buyer Parties be under any obligation to disclose any information that is subject toattorney-client or similar privilege. If Buyer shall be required to notify the Seller pursuant to the immediately precedingsentence, as soon as reasonably practicable after the Seller delivers to Buyer a written request, Buyer shall provide anyinformation reasonably requested by the Seller relating to any circumstance referred to in the immediately precedingsentence.(f)Notwithstanding anything to the contrary in this Agreement, none of the Seller, the Company Group, ortheir respective officers, directors, employees, accountants, legal counsel and other representatives shall be required to takeany action that would subject such Person to bear any costs, fees or expenses that will not be reimbursed in accordance withthe immediately following sentence or to pay any commitment or other similar fee or make any other payment, or incur anyother Liability, or provide or agree to provide any indemnity in connection with the Debt Financing or their performance oftheir respective obligations under this Section 8.9 and any information utilized in connection therewith, in each case, withrespect to the Company Group, that is not conditioned on, or is effective prior to the Closing. Buyer shall (i) promptly uponrequest by the Company reimburse the Company for all reasonable and documented out-of-pocket costs incurred by theCompany Group in connection with such cooperation (including those of their accountants, consultants, legal counsel,agents and other representatives) and (ii) indemnify and hold harmless the Seller, the Company Group, and their respectiveAffiliates and representatives from and against any and all Liabilities suffered or incurred by them in connection with thearrangement of the Debt Financing or providing any of the information utilized in connection therewith; in each case, otherthan to the extent such costs, expenses, Liabilities or other items occurred as a result of the gross negligence, bad faith orwillful misconduct of the Company Group.(g)Nothing in this Section 8.9 or otherwise in this Agreement shall limit or shall be construed as limiting orotherwise modifying the representations and warranties of the Buyer set forth in Section 6.7.8.10Employee MattersBuyer acknowledges and agrees that (a) obtaining or entering into any employment agreement or similaragreement with any employee of the Company is not a condition to the54Closing (any such agreement, a “Management Agreement”) and (b) the resignation of one of more management-level employees of theCompany shall neither (i) constitute a breach of any provision of this agreement nor (ii) result in the failure of any condition set forth inSection 7.1 to be satisfied or deemed satisfied; provided that such resignation is not the direct result of any action, that if taken after theClosing, would constitute a breach of that certain Restrictive Covenant Agreement, dated as of the date hereof, by and among theCompany, Buyer and Graycliff Mezzanine II LP, a Delaware limited partnership. If any Management Agreement has not beenobtained, Buyer will each continue to be obligated, subject to the satisfaction or waiver of the conditions set forth herein, toconsummate the transactions contemplated herein.ARTICLE IX SURVIVAL AND RELATED MATTERS9.1SurvivalAll representations, warranties, covenants and agreements set forth in this Agreement, the Transaction Documentsor in any writing or certificate delivered in connection with this Agreement or the transactions contemplated by this Agreement shallsurvive from the Closing Date until the twelve (12) month anniversary of the Closing Date; provided, however, the representations andwarranties set forth in Section 4.17(b) (Employee Benefit Plan), to the extent related to Tax, and Section 4.10 (Taxes) (collectively, the“Tax Representations”) shall survive until the earlier of thirty (30) days after the expiration of the applicable statute of limitationsapplicable to such Tax matter under applicable Tax law and the seventh (7th) anniversary of the Closing Date; provided, further, thatthe representations and warranties set forth in Section 4.23 (Environmental) shall survive until the fifth (5th) anniversary of the ClosingDate; provided, further, that the representations and warranties set forth in Section 4.1 (Organization and Corporation Power;Capitalization), Section 4.2 (Authorization of Transactions), Section 4.15 (Brokerage), Section 5.1 (Shares), Section 5.2 (Authorizationof Transactions), Section 5.4 (Brokerage), Section 6.1 (Organization and Corporate Power), Section 6.2 (Authorization ofTransaction), Section 6.6 (Brokerage) and Section 6.7(b) (Solvency) (collectively, with the Tax Representations, the “FundamentalRepresentations”) shall survive until the sixth (6th) anniversary of the Closing Date. The representations, warranties, covenants andagreements made herein are intended among other things to allocate the economic cost and the risks inherent in the transactionscontemplated hereby between the Parties and, accordingly, a Party shall be entitled to the remedies provided in this Agreement byreason of any breach of any such representation, warranty, covenant or agreement by another Party notwithstanding whether anyemployee, representative or agent of the Party seeking to enforce a remedy knew or had reason to know of such breach and regardlessof any investigation by such Party. Except as set forth in Section 9.3, no claim may be brought in respect of a breach of anyrepresentation, warranty or covenant contained in this Agreement after the expiration of the survival period applicable to suchrepresentation, warranty or covenant, as set forth in this Section 9.1.9.2Indemnification(a)The Seller’s Indemnification. After the Closing, the Seller shall indemnify Buyer, its Affiliates and theirrespective officers, directors, employees, agents, partners, representatives, successors and permitted assigns (collectively, the“Buyer Parties”) and55hold each of them harmless from and against and pay on behalf of or reimburse such Buyer Parties in respect of any loss,Liability, demand, claim, action, cause of action, cost, damage, deficiency, Tax, penalty, fine or expense, whether or notarising out of third party claims (including, without limitation, interest, penalties, reasonable attorneys’, accountants’ andother professionals’ fees and expenses, court costs and all reasonable amounts paid in investigation, defense or settlement ofany of the foregoing) (collectively, “Losses” and individually, a “Loss”) which any such Buyer Party suffers, sustains orbecomes subject to, arising from or as a result of:(i)the breach by the Seller or the Company of any representation or warranty made by the Selleror the Company contained in this Agreement, the other Transaction Documents or any certificate of the Seller orthe Company Group delivered by the Seller or the Company to the Buyer pursuant hereto or thereto;(ii)the breach of any covenant or agreement to be performed by (A) the Seller or (B) theCompany prior to the Closing contained in this Agreement or the other Transaction Documents;(iii)any Transaction Expenses of the Company as of the Closing to the extent not repaid prior to,or in connection with, the Closing and not otherwise included in the calculation of Final Transaction Expenses,Final Indebtedness, or Final Working Capital;(iv)any Indebtedness of the Company as of the Closing to the extent not repaid prior to, or inconnection with, the Closing and not otherwise included in the calculation of Final Indebtedness, FinalTransaction Expenses or Final Working Capital; and(v)any defined benefit pension plan, including any multiemployer pension plan, subject toTitle IV of ERISA, including as a consequence of any Acquired Company having been treated as a singleemployer with any ERISA Affiliate.provided, that with respect to any claim for indemnification by the Buyer pursuant to Section 9.2(a)(i): (A) the Seller shall have noliability for such claim unless the aggregate amount of Losses with respect to all indemnification claims made pursuant to Section9.2(a)(i) exceeds Nine Hundred Seventy Five Thousand Dollars ($975,000) (the “Deductible”) and then only to the extent the Lossesrelating to such claims exceed the Deductible; provided, that in calculating whether the Deductible has been exceeded, only claims (orseries of claims arising from the same or substantially similar facts or circumstances) for Losses in excess of Twenty-Five ThousandDollars ($25,000) (the “Mini-Basket”) shall be considered and (B) the Seller’s maximum liability for all such claims shall not exceedNine Hundred Seventy Five Thousand Dollars ($975,000) (the “Cap”); provided, that such limitation shall not apply to, and eachBuyer Party shall be entitled to make, claims for indemnification in respect of (i) Losses arising out of any breach of any FundamentalRepresentation, (ii) pre Closing Taxes (which are covered by Section 10.1(c); or (iii) Losses arising out of Actual Fraud in the makingof the representations and warranties in this Agreement, in each case notwithstanding the exhaustion of the Indemnification EscrowAmount;56provided further, however, that the Seller’s maximum liability for all claims pursuant to Section 9.2(a) and Section 10.1(c) shall notexceed an amount equal to the portion of the Purchase Price actually received by the Seller. For purposes of Section 9.2(a) andSection 9.2(b), the existence of a breach and the determination of the Loss related thereto shall be determined without giving effect toany qualification in the representations and warranties of the Seller or Buyer by “materiality,” “in all material respects,” “MaterialAdverse Effect” or words of similar effect, other than Section 4.6, Section 4.8(a), and Section 4.11, and, for the avoidance of doubt,any defined term.(b)Buyer Indemnification. Buyer Parties shall, jointly and severally, indemnify the Seller and itssuccessors and permitted assigns (collectively, the “Seller Parties”) and hold each of them harmless from and against and payon behalf of or reimburse the Seller Parties in respect of any Loss which such Seller Party suffers, sustains or becomessubject to, arising from or as the result of:(i)the breach by either Buyer Party of any representation or warranty made by such Buyer Partycontained in this Agreement, any other Transaction Document or any certificate delivered by Buyer to the Sellerpursuant hereto;(ii)the breach of any covenant or agreement to be performed by either Buyer Party contained inthis Agreement or the other Transaction Documents;(iii)the arrangement of the Debt Financing (including any action taken in accordance withSection 8.9); or(iv)the operations, conduct, errors or omissions of the Company after the Closing Date;provided, that with respect to any claim for indemnification by Buyer pursuant to Section 9.2(b)(i) (other than with regard toFundamental Representations or claims for Actual Fraud in the making of the representations and warranties of the Buyer Parties inthis Agreement): (A) Buyer shall have no liability for such claim unless the aggregate amount of Losses with respect to allindemnification claims made pursuant to Section 9.2(b)(i) exceeds the Deductible and then only to the extent the Losses relating tosuch claims exceed the Deductible; provided, further, that in calculating whether the Deductible has been exceeded, only claims (orseries of claims arising from the same or substantially similar facts or circumstances) for Losses in excess of the Mini-Basket shall beconsidered, and (B) Buyer’s maximum liability for all such claims shall not exceed the Cap; provided, that such limitation shall notapply to, and each Seller Party shall be entitled to make, claims for indemnification in respect of (i) Losses arising out of anyinaccuracy or breach of any Fundamental Representation and (ii) Losses arising out of Actual Fraud in the making of therepresentations and warranties in this Agreement.(c)Procedure.(i)Direct Claims. In order to seek indemnification against a party to this Agreement or one of itsAffiliates under this Article IX or Section 10.1(c), the Party claiming indemnification (the “Indemnified Party”)shall deliver notice (a “Claims Notice”) to the Party from whom the indemnification is sought (the “IndemnifyingParty”) (which notice, if sent by Buyer, shall be sent to the Seller57and shall also be sent to the Escrow Agent). The failure to give a prompt Claims Notice shall not, however, relievethe Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Partyforfeits any material right or defense by reason of such failure. Such Claims Notice shall describe the Direct Claimin reasonable detail and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been ormay be sustained by the Indemnified Party. The Indemnifying Party shall have 30 days after its receipt of theClaims Notice to respond in writing to such Direct Claim (an “Objection Notice”). During such 30-day period, theIndemnified Party shall allow the Indemnifying Party and its professional advisors to investigate the matter orcircumstance alleged to give rise to the Direct Claim and the Indemnified Party shall reasonably cooperate with theIndemnifying Party’s investigation by giving such necessary information and reasonable assistance, at theIndemnifying Party’s expense (including access to the Buyer’s, Seller’s and Company’s premises and personneland the right to examine and copy any accounts, documents or records). If the Indemnifying Party delivers anObjection Notice prior to 11:59 p.m. (ET) on the thirtieth (30th) day after the Indemnifying Party’s receipt of theClaims Notice, then no payment shall be made under this Section 9.2(c)(i) until such claim shall have beenresolved. If the Indemnifying Party fails to deliver an Objection notice prior to 11:59 p.m. (ET) on the thirtieth(30th) day following the Indemnifying Party’s receipt of the Claim Notice, then the Indemnifying Party shall beconclusively and irrevocably deemed to have accepted such Direct Claim and within three (3) Business Daysthereafter (i) if the Indemnifying Party is the Seller, then the Seller and Buyer shall deliver to the Escrow Agent aninstruction directing the Escrow Agent to deliver to Buyer (or its designee) from the Indemnification EscrowAmount an amount equal to the Losses set forth in such Claim Notice, and (ii) if the Indemnifying Party is Buyer,then Buyer shall pay to the Seller (or its designee) by wire transfer of immediate funds the amount in such ClaimsNotice. Notwithstanding the foregoing, if an Indemnifying Party fails to deliver an Objection Notice with respectto a Claims Notice involving (i) the breach of a Fundamental Representation, (ii) a claim for Actual Fraud in themaking of the representations and warranties in this Agreement or in any other Transaction Document, or (iii) aclaim arising from the breach of any covenant or agreement to be performed by a Party pursuant to this Agreementor the other Transaction Documents, then claims relating thereto shall be deemed to have been rejected, in whichcase the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party onthe terms and subject to the conditions of this Agreement.(ii)Resolution of Direct Claim Conflicts.(A)If the Indemnifying Party delivers an Objection Notice pursuant to Section 9.2(c)(i), the Seller and Buyer shall attempt in good faith to agree upon the rights of the respective parties withrespect to each of such claims that are rejected or deemed rejected. If the Indemnified Party is a BuyerParty, and if the Seller and Buyer should so agree as to a resolution to such indemnity claim, Buyer andthe Seller shall prepare, execute and58deliver to the Escrow Agent a joint written instructions setting forth such agreement, including theamounts Buyer and the Seller agree should be released from the Indemnification Escrow Amount. TheEscrow Agent shall be entitled to rely on any joint written instructions and make distributions of theIndemnification Escrow Amount in accordance with the terms thereof.(B)In the event Buyer and the Seller are unable to agree upon the resolution of anindemnity claim set forth in an Objection Notice within thirty (30) days following delivery of suchObjection Notice, or in the event of any other dispute arising pursuant to this Section 9.2 or Section10.1(c), either Buyer or the Seller may pursue any and all legal or equitable remedies available to thempursuant to this Agreement, and the Escrow Agent shall only distribute funds thereafter with respect tothe claims relating to such Objection Notice pursuant to joint written instructions as described in Section9.2(c)(ii)(A) or a final, non-appealable court order from a court of competent jurisdiction.(iii)Third Party Claims. In the event a Buyer Party or the Seller receives a third party claim (a“Third Party Claim”) for which indemnification may be sought hereunder against such Indemnified Party, suchIndemnified Party shall promptly provide written notification (a “Third Party Claim Notice”) to the IndemnifyingParty (which if the Indemnified Party is a Buyer Party, such Third Party Claim Notice shall be sent to the Sellerand the Escrow Agent) of such claim after it receives such Third Party Claim specifying the nature of such ThirdParty Claim and the amount or estimated amount thereof, together with copies of all notices and documents(including court papers) served on or received by such Indemnified Party, which notice must be identified as a“Third Party Claim Notice.” If the Third Party Claim may result in a claim for Losses payable from theIndemnification Escrow Amount, the Seller shall have the right, at its sole cost and expense, to assume the entirecontrol of the defense, compromise or settlement of such claim (including the selection of counsel reasonablysatisfactory to Buyer), subject to the right of the Indemnified Party to participate (with counsel of its choice, butthe fees and expenses of such additional counsel shall solely be at the expense of the Indemnified Party); provided,that the Indemnifying Party will not be entitled to control, and the Indemnified Party will be entitled to have solecontrol over, the defense, compromise or settlement of any Third Party Claim (and the cost of such defense andany Losses with respect to such Third Party Claim shall constitute an amount for which the Indemnified Party isentitled to indemnification hereunder) if (A) seeks non-monetary relief, (B) involves criminal or quasi-criminalallegations, (C) involves a claim to which the Indemnified Party reasonably believes an adverse determinationwould be detrimental to or injure the Indemnified Party’s reputation or future business prospects, (D) involves aclaim which, upon petition by the Indemnified Party, the appropriate court rules that the Indemnifying Party failedor is failing to vigorously prosecute or defend, or (E) involves a claim which the Indemnified Party believes ingood faith could not be satisfied by the Indemnifying Party if the claim were adversely decided; provided59that: if the named parties to any Third Party Claim or proceeding include both an Indemnifying Party and theIndemnified Party, and if the Indemnified Party has been advised in writing by counsel that there may be one ormore legal defenses available to such Indemnified Party that are different from, or additional to, those available tothe Indemnifying Party, then the Indemnified Party shall be entitled, at the Indemnifying Party’s reasonable costand expense, to one separate counsel of its own choosing. If the Indemnifying Party shall control the defense ofany such claim, (X) each Indemnified Party shall reasonably cooperate with the Indemnifying Party in the defensethereof and (Y) the Indemnifying Party will not compromise or settle, or offer or consent to compromise or settle,any such action, suit, proceeding, claim or demand (other than, after consultation with the applicable IndemnifiedParty, an action, suit, proceeding, claim or demand to be settled solely by the payment of money damages) that(A) does not involve granting by the Person or Persons asserting such claim or demand of an unconditional releasefrom all liability of the Indemnified Party and its Affiliates with respect to such claim (and any potential similar oranalogous claims), (B) involves any non-monetary relief or remedy, including any restrictions on any IndemnifiedParty’s ability to operate or compete or (C) involves any admission of wrongdoing or violation of law oracknowledges the Indemnified Party’s liability for future acts, in each case without the prior written consent of theIndemnified Party, which consent may be withheld in the Indemnified Party’s sole discretion. If the IndemnifyingParty does not assume the defense of a Third Party Claim within thirty (30) days after receipt of the Third PartyClaim Notice (or ceases in good faith to continue the defense), then the Indemnified Party shall have the right tocontrol the defense, compromise or settlement of such Third Party Claim (including the selection of counsel),subject to the right of the Indemnifying Party to participate (with counsel of its choice, but the fees and expensesof such additional counsel shall solely be at the expense of the Indemnifying Party), and the Indemnified Party willnot compromise or settle any such action, suit, proceeding, claim or demand without the prior written consent ofthe Indemnifying Party, which consent shall not be unreasonably withheld, conditioned or delayed. The partyhereto that is not conducting the defense shall provide the party conducting the defense and its counsel withreasonable access during normal business hours to such party’s records and personnel relating to any Third PartyClaim and both parties shall otherwise reasonably cooperate in conducting the defense in the defense or settlementthereof. This Section 9.2(c)(iii) shall not apply to any Third Party Claims involving Taxes, which shall begoverned by Section 10.1(e) of this Agreement.(d)Tax Savings; Insurance and Third Party Recoveries. The amount of any Losses payable under Section9.2 and Section 10.1(c) by the Indemnifying Party shall be net of any (i) amounts actually recovered by the IndemnifiedParty under applicable insurance policies (excluding the R&W Policy), or from any other Person alleged to be responsibletherefor (net of any expenses incurred in pursuing the claim and the net present value of any premium increase related to thepayment of the claim (and no right of subrogation shall accrue to such third party indemnitor or insured thereunder) and (ii)Tax savings attributable to such Losses realized by the Indemnified Party in the taxable year in which such Losses and theimmediately succeeding taxable year, calculated on a “with or60without” basis and taking into account any Tax detriment to such Indemnified Party from the receipt of the indemnificationpayment; provided, however, that any increase in Tax attributable to a reduction in Purchase Price by reason of Section9.2(e) herein shall not be treated as a detriment for this purpose. If the Indemnified Party receives any amounts underapplicable insurance policies (excluding amounts received under the R&W Policy), or from any other Person alleged to beresponsible for any Loss, subsequent to an indemnification payment by the Indemnifying Party, then such Indemnified Partyshall promptly reimburse the Indemnifying Party for any payment made or expense incurred by such Indemnifying Party inconnection with providing such indemnification payment up to the amount received by the Indemnified Party, net of anyreasonable expenses incurred by such Indemnified Party in collecting such amount.(e)Payments. Amounts paid to or on behalf of any Party as indemnification under Section 10.1(c) or thisArticle IX shall be treated as adjustments to the consideration paid for the Shares hereunder.(f)Mitigation of Damages. Each Party’s right to indemnification hereunder shall be subject to such Party’sobligations under applicable law to mitigate damages, including pursuing recovery of such damages under anyindemnification agreement or other bona fide arrangements with third parties or any applicable insurance policy, and eachParty shall use commercially reasonable efforts to mitigate damages for which indemnification is available hereunder to theextent applicable law requires mitigation of damages for which breach of contract damages are available; provided, however,that no Party shall be required to pursue indemnification from or bring any Action against a customer or supplier.(g)Offset. Any Loss which any Buyer Party is entitled to indemnification from the Seller pursuant to thisArticle IX or Section 10.1(c) may, at the option of such Buyer Party, be satisfied by setting off all or any portion of suchLosses against payment of any amount due to the Seller from any Buyer Party.(h)R&W Policy; Escrow Account. Notwithstanding anything to the contrary contained herein, theaggregate maximum amount available to, and the sole and exclusive remedy of, the Buyer Parties for claims forindemnification pursuant to Section 9.2(a) shall be the proceeds of the Indemnity Escrow Amount in the Escrow Accountfrom time to time; provided, however, that the limitation set forth in this Section 9.2(h) shall not apply to Losses arising outof or resulting from a breach of the Fundamental Representations or Actual Fraud in the making of the representations andwarranties in this Agreement or in the other Transaction Documents.(i)Environmental Limitations. Buyer Parties shall not be entitled to recover under this Article IX for anyLoss (and no such Loss shall be aggregated for purposes of this Article IX) to the extent caused or triggered by (i) any“Phase II” investigation, sampling or other invasive testing of environmental media, any remedial or investigatory action orany disclosure or reporting to any Governmental Authority or other Person, in each case by Buyer and that is not required byEnvironmental Laws or Licenses issued under Environmental Laws, mandated by a Governmental Authority, necessary inresponse61to developments occurring after the Closing which indicate a potential material threat to human health or the environment,conducted in connection with defending against or otherwise responding to a Third Party Claim, or required to comply withany lease requirements pertaining to any Leased Real Property; (ii) any changes in Law or (iii) any change in operations ator use of a properties of the Buyer or the Company Group, in the case of each of clauses (i), (ii), and (iii), that occurs afterthe Closing.(j)Calculation of Losses.(i)Notwithstanding anything to the contrary herein, the Seller shall have no obligation toindemnify any Buyer Party pursuant to this Section 9.2 for any Loss resulting from or arising from (i) any amountsincluded in the calculation of the Final Indebtedness, Final Transaction Expenses, or Final Working Capital,including as any Tax liabilities, as finally determined pursuant to Section 2.3(c) of this Agreement; (ii) any Taxeswith respect to which Seller has an indemnification obligation under Section 10.1(c) of this Agreement; (iii) Taxesresulting from an actual or deemed election under Section 338 or Section 336 of the Code (or any correspondingor similar election under state, local or foreign Tax law) with respect to the transactions pursuant to thisAgreement; (iv) Taxes attributable to an action taken by Buyer or any of its Affiliates (including any member ofthe Company Group) outside the Ordinary Course of Business and not contemplated by this Agreement on theClosing Date following the Closing; (vi) Taxes with respect to any Tax Period beginning on the day after theClosing Date or with respect to the portion of any Straddle Period beginning on the day after the Closing Date(determined under the principles of Section 10.1(d)) attributable to a breach of a Tax Representation other than abreach of any of the Tax Representations set forth in clauses (ix), (xii), (xv), and (xvii) (solely as such clause (xvii)relates to “listed transactions” within the meaning of Section 6707A(c)(2) of the Code) of Section 4.10; or (vii)Taxes attributable to a breach by Buyer of any of its obligations under Section 10.1(g) of this Agreement.(ii)Notwithstanding anything to the contrary contained herein, in no event shall any Party beliable for any punitive or exemplary damages, or any consequential damages to the extent (and only to the extent)that such damages are not otherwise recoverable under a breach of contract claim under Delaware Law (except tothe extent any of the forgoing are awarded in a judgment issued by a court or other authority of competentjurisdiction in any Third Party Claim), in connection with (a) a breach of any Fundamental Representation or abreach of the representations and warranties in Section 4.6 of this Agreement, (b) Actual Fraud in the making ofthe representations and warranties in this Agreement or any other Transaction Document, or (c) a claim arisingfrom the breach of any covenant or agreement to be performed by a Party pursuant to this Agreement or the otherTransaction Documents.9.3Exclusive Remedy62Except to the extent provided in Section 11.13 and in the case of Actual Fraud in the making of any representationand warranty (including with respect to any survival periods or other limitations on indemnification (whether in respect of dollarthresholds or otherwise) set forth in this Agreement or any other Transaction Document), each of the Parties acknowledges and agreesthat the indemnification provisions set forth in this Article IX and Section 10.1(c) shall be the exclusive remedies of the Parties withrespect to any and all claims by the Buyer Parties (whether in contract or tort) relating to this Agreement or any other TransactionDocument, the events giving rise to or subject matter of this Agreement and/or the transactions contemplated hereby or thereby.9.4Escrow MattersFrom and after the Closing, any indemnification for a Loss for which a Buyer Party is entitled pursuant to Section9.2(a)(i) and Section 10.1(c) as a result of a breach of representations and warranties (other than the Fundamental Representations orLosses in respect of Actual Fraud in the making of the representations and warranties in this Agreement) shall be first satisfied byrecouping all of such Loss from the Indemnification Escrow Amount in accordance with the terms of this Agreement and the EscrowAgreement, until the Indemnification Escrow Amount is exhausted or released pursuant thereto.ARTICLE X ADDITIONAL AGREEMENTS10.1Tax Matters(a)Preparation and Filing of Tax Returns. Buyer shall timely prepare and file, or shall cause to be timelyprepared and filed, Tax Returns for the Company Group with respect to taxable periods ending on or before the ClosingDate (the “Pre-Closing Tax Period”) and Straddle Periods, in each such case which are filed or originally due to be filedafter the Closing Date (taking into account any extension of time to file granted to or obtained on behalf thereof); provided,however, that Buyer shall provide each such Tax Return (together with supporting schedules and information) to the Sellerfor its review, comment and approval, which approval shall not be unreasonably withheld conditioned or delayed, at leasttwenty (20) Business Days prior to the date on which such Tax Return is due to be filed and shall incorporate into the finalTax Returns filed any reasonable comments provided by the Seller not later than five (5) Business Days prior to the due dateof such Tax Return. Such Tax Returns shall be prepared in a manner consistent with past practices except as otherwiserequired to comply with applicable Law; provided that any deductions that are attributable to the write-off of capitalizedfinancing fees, and the deductible portions of Transaction Expenses (which, for purposes of any such Transaction Expensesthat are success-based under IRS Revenue Procedure 2011-29, shall equal but not exceed seventy percent (70%) thereof,such that the remaining thirty percent (30%) thereof shall be capitalized in accordance with the safe harbor electionestablished by IRS Revenue Procedure 2011-29) and Indebtedness and any other expenses that arise on or before theClosing Date as a result of the transactions contemplated hereby, and any compensatory payments or deductible amountsrelated to any accrued bonus or similar amount, shall be deducted to the maximum extent allowable under applicable Law inthe63Pre-Closing Tax Period. The Seller shall pay to Buyer any amount shown to be due on any such Tax Return for which theSeller is obligated to indemnify the Buyer pursuant to Section 10.1(c)(i) taking into account the limitations set forth in ArticleIX and Section 10.1(c)(ii)). With respect to any Tax shown to be due on any such Tax Return, Buyer shall pay to the Sellerthe excess, if any, of the amount of such Tax included in the Estimated Accrued Income Taxes over the amount of such Taxshown pursuant to Section 10.1(c)(i), taking into account the limitations set forth in Article IX and Section 10.1(c)(ii).(b)Cooperation on Tax Matters. The Parties shall cooperate fully, as and to the extent reasonablyrequested by any other Party, in connection with the filing of Tax Returns, and any audit, litigation or other proceeding withrespect to Taxes. Such cooperation shall include the retention and (upon the other Party’s request) the provision of recordsand information which are reasonably relevant to any such audit, litigation or other proceeding and making employeesavailable on a mutually convenient basis to provide additional information and explanation of any material providedhereunder.(c)Tax Indemnification.(i)The Seller shall indemnify the Buyer Parties and hold them harmless from and against,without duplication, (i) all Taxes (or the non-payment thereof) of the Company Group for all Pre-Closing TaxPeriods and for all Straddle Periods, the portion through the end of the Closing Date as determined pursuant toSection 10.1(d), (ii) all Taxes imposed on the Company or any Subsidiary as a result of being a member of anAffiliated Group of which the Company (or any predecessor thereof) is or was a member on or prior to theClosing Date, and (iii) any and all Taxes of any Person (other than the Company and its Subsidiaries) imposed onthe Company Group as a transferee or successor, by contract or pursuant to any law, rule or regulation, whichTaxes relate to an event or transaction occurring before the Closing, and (iv) the employer portion of any and allemployment and payroll Taxes imposed on the Company Group with respect to compensatory payments requiredto be made in connection with the transactions contemplated hereby, excluding, with respect to any such item, theamount (if any) of such item that was taken into account in Indebtedness or Transaction Expense as finallydetermined pursuant to Section 2.3. Notwithstanding any other provision of this Agreement to the contrary, theSeller’s obligations under this Section 10.1(c) shall survive until the earlier of thirty (30) days after the expirationof the applicable statute of limitations applicable to such Tax matter under applicable Tax law and the seventh(7th) anniversary of the Closing Date.(ii)Notwithstanding anything to the contrary herein, the Seller shall have no obligation toindemnify any Buyer Party pursuant to Section 10.1(c)(i) for any Loss resulting from or arising from (i) any Taxincluded in the Final Indebtedness, Final Transaction Expenses, or Final Working Capital, including as any Taxliabilities, as finally determined pursuant to Section 2.3(c) of this Agreement; (ii) Taxes resulting from an actual ordeemed election under Section 338 or Section 336 of the Code (or any corresponding or similar election understate, local or foreign Tax law) with respect to the transactions pursuant to64this Agreement; (iii) Taxes attributable to an action taken by Buyer or any of its Affiliates (including any memberof the Company Group) outside the Ordinary Course of Business and not contemplated by this Agreement on theClosing Date following the Closing; (iv) Taxes with respect to any Tax Period beginning on the day after theClosing Date or with respect to the portion of any Straddle Period beginning on the day after the Closing Date(determined under the principles of Section 10.1(c)(ii)) attributable to a breach of a Tax Representation other thana breach of any of the Tax Representations set forth in clauses (ix), (xii), (xv), and (xvii) (solely as such clause(xvii) relates to “listed transactions” within the meaning of Section 6707A(c)(2) of the Code) of Section 4.10; or(v) Taxes attributable to a breach by Buyer of any of its obligations under Section 10.1(g) of this Agreement.(d)Straddle Period. In the case of any taxable period that includes (but does not end on) the Closing Date(a “Straddle Period”), the amount of any Taxes based on or measured by income, receipts, or payroll (including withholdingwith respect to any such Tax) of the Company Group for the pre-Closing portion of such Straddle Period shall bedetermined based on an interim closing of the books as of the close of business on the Closing Date, and the amount of otherTaxes of the Company Group for the pre-Closing portion of such Straddle Period shall be deemed to be the amount of suchTaxes for the entire taxable period multiplied by a fraction the numerator of which is the number of days in the taxableperiod ending on the Closing Date and the denominator of which is the number of days in the Straddle Period.(e)Tax Contests. The Seller shall have the right to control, and the Buyer shall have the right to participatein (at its own expense), any audit, litigation or other proceeding with respect to Taxes and Tax Returns of the CompanyGroup for which a Buyer Party would be entitled to indemnification under this Agreement (a “Pre-Closing Tax Contest”);provided, however, that the Seller shall not settle or compromise any such Pre-Closing Tax Contest without the Buyer’sprior written consent (not to be unreasonably withheld, conditioned or delayed). The Seller shall keep the Buyer reasonablyinformed of the details and status of such matter (including promptly providing the Buyer with copies of all writtencorrespondence regarding such matter). The Buyer shall provide the Seller with prompt written notice of any writteninquiries by a Governmental Authority relating to a Pre-Closing Tax Contest within ten (10) Business Days of the receipt ofsuch notice. Such notice shall contain factual information (to the extent known to the Buyer) describing the Pre-Closing TaxContest in reasonable detail and shall include copies of any notice or other document received from any GovernmentalAuthority in respect of such Pre-Closing Tax Contest. If Buyer fails to give the Seller such notice of a Pre-Closing TaxContest, the Seller’s obligation to indemnify the Buyer for any Loss arising out of such Pre-Closing Tax Contest shall bereduced to the extent such failure materially prejudices Seller’s indemnification obligations under this Agreement. If theSeller elects not to control such Pre-Closing Tax Contest, then the Buyer shall control such matter, provided in such case that(i) the Seller shall have the right to participate in any such matter (at its own expense), (ii) the Buyer shall keep the Sellerreasonably informed of the details and status of such matter (including promptly providing the Seller with copies of allwritten correspondence regarding such matter), and (iii) the Buyer shall not settle any such proceedings without65the prior written consent of the Seller (not to be unreasonably withheld, conditioned or delayed). In the event of any conflictbetween this Section 10.1(e) and Section 9.2(c)(iii) (Third Party Claims), the provisions of this Section 10.1(e) shall govern.(f)Tax Refunds. After the Closing Date, except to the extent (A) specifically included as a Tax asset inFinal Closing Statement as finally determined pursuant to Section 2.3(c) of this Agreement, or (B) attributable to thecarryback of any loss from a Tax Period beginning on the day after the Closing Date or with respect to the portion of anyStraddle Period beginning on the day after the Closing Date (determined under the principles of Section 10.1(d)), the Sellershall be entitled to all Tax refunds (and overpayment of Taxes for a Pre-Closing Tax Period used to reduce any Tax liabilityfor a Tax period beginning after the Closing Date (an “Overpayment Credit”)) received or utilized by Buyer or any of itsAffiliates, the Company, or any of its Subsidiaries for any Pre-Closing Tax Period to the extent attributable to (x) Taxes paidby or on behalf the Company or its Subsidiaries on or prior to the Closing Date, (y) Taxes indemnified by the Sellerhereunder (in each case, as finally determined hereunder), or (z) Taxes included in the Final Closing Statement, as finallydetermined pursuant to Section 2.3(c)). Buyer will pay to the Seller any such Tax refund (or an Overpayment Credit)promptly (but in all cases within five business days) after actual receipt of such Tax refund or utilization of an OverpaymentCredit; provided that, any such payments to the Seller shall be reduced by any Taxes and reasonable third party costs andexpenses attributable to the receipt or delivery of such Tax refund. Buyer shall, if the Seller so requests and at the Seller’sexpense, file (or cause to be filed) any amended Tax Return or claim for any Tax refunds or equivalent amounts to which theSeller is entitled hereunder.(g)Tax Covenants. Without the prior written consent of the Seller, which consent will not be unreasonablywithheld, conditioned or delayed, Buyer shall not (A) make, and shall not permit any of its Affiliates (including, after theClosing, the Company and its Subsidiaries) to make, any Tax election of the Company or any of its Subsidiaries for a Pre-Closing Tax Period; or (B) permit any of its Affiliates (including the Company and its Subsidiaries after the Closing) toparticipate in any “voluntary disclosure initiative” (or similar program under federal, state, local or non-U.S. tax Law); or (C)to amend, refile or otherwise modify, any election or Tax Return, in each case, of the Company and its Subsidiaries withrespect to any Pre-Closing Tax Period.10.2Certain Employee Matters(a)During the period commencing at the Closing and ending on the date which is twelve (12) months fromthe Closing (or if earlier, the date of the employee’s termination of employment with the Company), Buyer shall and shallcause the Company Group to provide each employee set forth on Schedule 10.2 who remains employed with the CompanyGroup or the Buyer immediately after the Closing Date (“Company Group Continuing Employee”) with: (i) base salary orhourly wages (excluding any overtime wages) which are no less than the base salary or hourly wages provided to suchCompany Group Continuing Employee by the Company Group immediately prior to the Closing; (ii) target bonusopportunities (excluding equity-based compensation), if any, which are no less than the target bonus opportunities(excluding equity-based compensation) provided66to such Company Group Continuing Employee by the Company Group immediately prior to the Closing and; (iii) severancebenefits that are no less favorable than the practice, plan or policy in effect for such Company Group Continuing Employeeimmediately prior to the Closing.(b)With respect to any employee benefit plan maintained by Buyer or its Subsidiaries (collectively “BuyerBenefit Plan”) in which any Company Group Continuing Employees will participate effective as of the Closing, Buyer shall,or shall cause the Company Group, to recognize all service of the Company Group Continuing Employees with theCompany Group, as if such service were with Buyer, for vesting and eligibility purposes in any Buyer Benefit Plan in whichsuch Company Group Continuing Employees may be eligible to participate after the Closing Date; provided, however, suchservice shall not be recognized to the extent that (i) such recognition would result in a duplication of benefits, or (ii) suchservice was not recognized for similar purposes under a corresponding Employee Benefit Plan.(c)This Section 10.2 shall be binding upon and inure solely to the benefit of each of the Parties hereto, andnothing in this Section 10.2, express or implied, shall confer upon any person any rights or remedies of any nature. ThisSection 10.2 (i) shall not be construed to establish, amend or modify any benefit plan, program, agreement or arrangement orcreate any right in any Company Group employee or any other person to continued employment of any nature or duration,(ii) shall not alter or limit the Buyer’s, the Company Group’s or any of their Affiliates’ ability to amend, modify or terminateany particular benefit plan, program, agreement or arrangement, or (iii) is intended to confer upon any current or formeremployee any right to employment or continued employment for any period of time by reason of this Agreement, or anyright to a particular term or condition of employment.10.3Press Releases and AnnouncementsExcept as required by Law, the Parties agree that no press release or other public announcement (including in anytrade journal or other publication) of the transactions contemplated hereby shall be made without the prior written consent of Buyer andthe Seller; provided that the Seller’s consent shall not be unreasonably withheld, conditioned or delayed.10.4Further TransfersThe Seller and the Company shall execute and deliver such further instruments of conveyance and transfer andtake such additional action as Buyer may reasonably request to effect, consummate, confirm or evidence the transfer to Buyer of theShares and any other transactions contemplated hereby. The Buyer shall pay any costs associated with the foregoing.10.5ExpensesExcept as otherwise provided herein, each of the Parties shall pay all of its own fees, costs and expenses(including, without limitation, fees, costs and expenses of legal counsel, investment bankers, brokers or other representatives andconsultants and appraisal fees, costs and expenses) incurred in connection with the negotiation of this Agreement, the other Transaction67Documents, the performance of its obligations hereunder and thereunder, and the consummation of the transactions contemplatedhereby and thereby. Except as otherwise provided herein, the Seller shall pay all such costs incurred by the Company prior to theClosing.10.6Buyer Guaranty(a)The Buyer Guarantors, jointly and severally, hereby unconditionally, absolutely, and irrevocablyguaranty to the Seller the full and punctual performance of and compliance with all covenants, agreements and otherobligations of Buyer, now or hereafter existing, under this Agreement and each of the Ancillary Documents, including thedue and prompt performance of all covenants, agreements, obligations and other Liabilities of the Buyer under or in respectof this Agreement and the other Transaction Documents (as now or hereafter in existence, the “Obligations”). The guarantyset forth in this Section 10.6 is an absolute, present, primary, unconditional and continuing guaranty of performance,payment and compliance and, without limiting the generality of the foregoing, shall not be released, discharged or otherwiseaffected by any of the following: (a) any modification, amendment, restatement, waiver or rescission of, or any consent tothe departure from, any of the terms of this Agreement approved by the Seller; (b) except as expressly stated herein, anyexercise or non-exercise by Buyer of any right or privilege under this Agreement or any notice of such exercise on non-exercise; (c) any extension, renewal, settlement, compromise, waiver or release in respect of any Obligation, by operation oflaw or otherwise, to the extent approved by or applicable to the Seller, or any assignment of any Obligation by Buyer; (d)any change in the corporate existence, structure or ownership of the Seller; (e) any insolvency, bankruptcy, reorganization orother similar proceeding affecting the Seller or its assets or any resulting release or discharge of any Obligation; (f) theexistence of any defense, set-off or other rights (other than a defense of payment or performance) that Buyer Guarantor mayhave at any time against the Seller, whether in connection herewith or any unrelated transactions; or (g) any other act orfailure to act or delay of any kind of Seller or, prior to the Closing, the Company. This Section 10.6 shall continue to beeffective, or be automatically reinstated, as the case may be, if at any time payment or performance, or any part thereof, ofany of the Obligations is rescinded or must otherwise be restored, returned or rejected by Buyer for any reason. BuyerGuarantor hereby waives any and all defenses to enforcement of the guaranty set forth in this Section 10.6, now existing orhereafter arising, which may be available to guarantors, sureties and other secondary parties at law or in equity.(b)Buyer Guarantors acknowledge and agree that their liability under this Section 10.6 is joint and severalwith Buyer and, upon any breach or default by Buyer, the Seller shall not be obligated to first attempt enforcement againstBuyer. In furtherance of the foregoing, the Buyer Guarantors acknowledge that the Seller may bring and prosecute aseparate action or actions against the Buyer Guarantors for the full amount of the Obligations, regardless of whether anyaction is brought against Buyer. Buyer Guarantors agree that (i) the Seller would be damaged irreparably in the event thatany of the provisions of this Section 10.6 are not performed in accordance with their specific terms and (ii) the Seller shall beentitled, in addition to any other remedy at law or in equity, to specific performance of the terms of this Section 10.6, withoutthe necessity of proving the68inadequacy of money damages as a remedy and without posting any bond in connection therewith.(c)Each Buyer Guarantor represents and warrants to the Seller that, as of the date of this Agreement and asof the Closing Date: (i) Guarantor has the requisite power and authority to execute and deliver this Agreement and toperform its obligations under this Agreement, including the obligations set forth in Section 10.6; (ii) this Agreement has beenduly and validly executed and delivered by such Buyer Guarantor and, assuming the due authorization, execution anddelivery by the other parties hereto, constitutes the valid and legally binding obligation of such Buyer Guarantor, enforceableagainst such Buyer Guarantor in accordance with its terms and conditions, subject to applicable bankruptcy, insolvency,reorganization, moratorium and other similar Laws affecting creditors’ rights generally and general principles of equity; and(iii) the execution and delivery of this Agreement, and such Buyer Guarantor’s performance under this Agreement, includingsuch Buyer Guarantor’s performance under Section 10.6(a), do not (x) violate any Law, Decree or other restriction of anyGovernmental Authority to which such Buyer Guarantor is subject, or any provision of its Organizational Documents or (y)conflict with, result in a breach of, constitute a default under, result in the acceleration of any obligation under, create in anyparty the right to accelerate, terminate, modify, or cancel, or require any notice under, any Contract, License, instrument, orother arrangement to which such Buyer Guarantor is a party or by which it is bound or to which any of its assets is subject,including, without limitation, the Buyer Parties’ existing credit facilities and (iv) the Buyer Guarantors have the financialcapacity to pay and perform their obligations under this Agreement, and all funds necessary for the Buyer Guarantors tofulfill their Obligations under this Agreement until the earliest of (x) the Closing Date, (y) valid termination of thisAgreement or (c) payment to the Buyer of the full amount of the Obligations.ARTICLE XI MISCELLANEOUS11.1Amendment and WaiverThis Agreement may be amended and any provision of this Agreement may be waived; provided that any suchamendment or waiver shall be binding upon a Party only if such amendment or waiver is set forth in a writing executed by the Seller,Buyer and the Company. No course of dealing between or among any persons having any interest in this Agreement shall be deemedeffective to modify, amend or discharge any part of this Agreement or any rights or obligations of any Party under or by reason of thisAgreement. Notwithstanding anything to the contrary contained herein, this Section 11.1 and Section 11.3, Section 11.9, Section11.13, Section 11.14, and Section 11.17 (and any other provision of this Agreement to the extent an amendment, supplement, waiveror other modification of such provisions would modify the substance of such Sections) may not be amended, supplemented, waived orotherwise modified in any manner that is materially adverse to the Debt Financing Source without the prior written consent of amajority in interest of the Debt Financing Sources party to the Debt Commitment Letter.11.2Notices69For purposes of the Closing, the delivery of documents by or to the attorneys or other agents or representatives ofa Party shall be deemed to constitute delivery by or to that Party. All notices, demands and other communications given or deliveredunder this Agreement shall be in writing and shall be deemed to have been given when personally delivered, mailed by first class mail,return receipt requested, or delivered by express courier service or via email transmission (with hard copy to follow). Notices,demands and communications to the Seller, the Company and Buyer shall, unless another address is specified in writing, be sent to theaddress or facsimile indicated below:Notice to the Seller or, prior to the Closing, the Company:Talon Innovations Holdings LLCc/o Graycliff Partners LP500 Fifth Avenue, 47th FloorNew York, NY 10110Attention: Duke Punhong and Carl BarcomaEmail:dpunhong@graycliffpartners.comcbarcoma@graycliffpartners.comwith a copy (which shall not constitute notice) to:Robinson & Cole LLPChrysler East Building666 Third Avenue, 20th FloorNew York, NY 10017Attention: Stephen P. HansonEmail: shanson@rc.comNotice to Buyer or, following the Closing, the Company, to:c/o Ichor Systems, Inc.3185 Laurelview CourtFremont, CA 94538Attention: Maurice Carson Email: mcarson@ichorsystems.com with a copy (which shall not constitute notice) to:Kirkland & Ellis LLP3330 Hillview AvenuePalo Alto, CA 94304Attention: Adam D. Phillips, P.C.Email: adam.phillips@kirkland.com 11.3Binding Agreement; AssignmentThis Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties andtheir respective successors and permitted assigns; provided that neither this Agreement nor any of the rights, interests or obligationshereunder may be assigned70by any Party without the prior written consent of the Seller and Buyer. Without the prior written consent of any Party, Buyer and itspermitted assigns may at any time, in their sole discretion, assign, in whole or in part, (a) their right to receive the Shares to one or moreof their Affiliates; (b) their rights under this Agreement and the other Transaction Documents for collateral security purposes to anylender providing financing to Buyer or any of Buyer’s holdings companies or subsidiaries; and (c) their rights under this Agreementand the other Transaction Documents, in whole or in part, to any subsequent purchaser of Buyer, such permitted transferee or any oftheir divisions or any material portion of their assets (whether such sale is structured as a sale of stock, sale of assets, merger,recapitalization or otherwise); provided, however, that Buyer shall continue to remain liable for all obligations, Liabilities, warrantiesand covenants of Buyer in the event of any such assignment.11.4SeverabilityIf any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction orother Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictionsof this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economicor legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such adetermination, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties asclosely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originallycontemplated to the fullest extent possible.11.5Interpretation; Construction(a)If any Party has breached any representation, warranty, or covenant contained herein in any respect, thefact that there exists another representation, warranty, or covenant relating to the same subject matter (regardless of therelative levels of specificity) which the Party has not breached shall not detract from or mitigate the fact that the Party is inbreach of the first representation, warranty, or covenant. In addition, each of the Parties acknowledges and agrees that,except to the extent provided otherwise herein, any purchase price adjustments as a result of the application of any provisionof this Agreement or any other of the Transaction Documents do not prejudice or limit in any respect whatsoever any Party’srights under any other provision of this Agreement or any other Transaction Document or pursuant to any other applicablerequirements of law, except as expressly set forth herein and provided, that no Party shall be entitled to recover for a Loss tothe extent such Party has previously been made-whole for such Loss. References in this Agreement to dollar amountthresholds are not, and shall not be deemed to be, evidence of a Material Adverse Effect or “materiality”. Any referenceherein to “provided” or “made available” to Buyer means, with respect to any document or information, that the same hasbeen made available to Buyer for a continuous period of at least two (2) Business Days prior to the date of this Agreementby means of the virtual data room located at https://merrillcorp.com under project name “Thor Data Room”.(b)Each of the Parties acknowledges that it has been represented by independent counsel of its choicethroughout all negotiations that have preceded the71execution of this Agreement and that it has executed the same with consent and upon the advice of said independentcounsel. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity orquestion of intent arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burdenof proof shall arise, or rule of strict construction applied, favoring or disfavoring any Party by virtue of the authorship of anyof the provisions of this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation ofany ambiguities in this Agreement against the Party that drafted it is of no application and is hereby expressly waived by theParties.11.6CaptionsThe captions used in this Agreement are for convenience of reference only and do not constitute a part of thisAgreement and shall not be deemed to limit, characterize or in any way affect any provision of this Agreement, and all provisions ofthis Agreement shall be enforced and construed as if no caption had been used in this Agreement.11.7Entire AgreementThe Disclosure Schedules identified in this Agreement are incorporated herein by reference. This Agreement andthe documents referred to herein contain the entire agreement between the Parties and supersede any prior understandings, agreementsor representations by or between the Parties, written or oral, which may have related to the subject matter hereof in any way.11.8CounterpartsThis Agreement may be executed in multiple counterparts, each of which shall be deemed an original but all ofwhich taken together shall constitute one and the same instrument.11.9Governing Law(a)This Agreement shall be governed by and construed in accordance with the domestic Laws of the Stateof Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or anyother jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of Delaware. Anyaction, suit or other proceeding, at law or in equity, arising out of or relating to this Agreement or any agreements ortransactions contemplated hereby shall only be brought in any state or federal court in Wilmington, Delaware. THEPARTIES AGREE THAT JURISDICTION AND VENUE IN ANY ACTION BROUGHT BY ANY PARTYPURSUANT TO THIS AGREEMENT SHALL PROPERLY AND EXCLUSIVELY LIE IN SUCH COURTS. BYEXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY IRREVOCABLY AND EXCLUSIVELYSUBMITS TO THE JURISDICTION OF SUCH COURTS FOR ITSELF AND IN RESPECT OF ITS PROPERTYWITH RESPECT TO SUCH ACTION. THE PARTIES IRREVOCABLY AGREE THAT VENUE WOULD BEPROPER IN SUCH COURT, AND HEREBY WAIVE ANY OBJECTION THAT SUCH COURT IS AN IMPROPEROR INCONVENIENT FORUM FOR THE RESOLUTION OF SUCH ACTION. THE72PARTIES FURTHER AGREE THAT THE MAILING BY CERTIFIED OR REGISTERED MAIL, RETURNRECEIPT REQUESTED, OF ANY PROCESS REQUIRED BY ANY SUCH COURT SHALL CONSTITUTEVALID AND LAWFUL SERVICE OF PROCESS AGAINST THEM, WITHOUT NECESSITY FOR SERVICE BYANY OTHER MEANS PROVIDED BY STATUTE OR RULE OF COURT. EACH PARTY HERETO HEREBYWAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TOA TRIAL BY JURY IN RESPECT TO ANY PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF,UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE DEBT FINANCING OR ANY TRANSACTIONCONTEMPLATED HEREBY OR THEREBY. NOTWITHSTANDING THE FOREGOING, CLAIMS ANDACTIONS THAT MAY BE BASED UPON, ARISE OUT OF OR RELATE TO THE DEBT FINANCING SOURCE(WHETHER IN LAW, CONTRACT TORT, EQUITY OR OTHERWISE) SHALL BE GOVERNED BY ANDCONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVINGEFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THESTATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OFTHE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.(b)Notwithstanding the foregoing clause (a), each Party hereto agrees that it will not bring nor support, andwill not support any of its Affiliates in bringing or supporting, any action, cause of action, cross-claim or third-party claim ofany kind or description, whether in law or in equity, whether in contract or in tort or otherwise against any Debt FinancingSource that may be based upon, arise out of, or relate to the Debt Financing or the Debt Financing Source in any forumother than the Supreme Court of the State of New York, County of New York, or, if under applicable law exclusivejurisdiction is vested in federal courts, in the United States District Court for the Southern District of New York (and theappellate courts thereof). Each party hereto waives any objection to the laying of venue in any such action, suit orproceeding in federal and state courts of the State of New York located in the County of New York, and further waives notto plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought inany inconvenient forum.11.10Parties in InterestNothing in this Agreement, express or implied, is intended to confer on any Person other than the Parties and theirrespective successors and assigns any rights or remedies under or by virtue of this Agreement, except as provided in Section 11.13.11.11Delivery by Facsimile or Electronic MailThis Agreement and any Transaction Document, and any amendments hereto or thereto, to the extent signed anddelivered by means of a facsimile machine or digital imaging and electronic mail, shall be treated in all manner and respects as anoriginal Contract and shall be considered to have the same binding legal effects as if it were the original signed version thereofdelivered in person. At the request of any party hereto or to any such Contract, each other party73hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such Contractshall raise the use of a facsimile machine or digital imaging and electronic mail to deliver a signature or the fact that any signature orContract was transmitted or communicated through the use of a facsimile machine or digital imaging and electronic mail as a defense tothe formation of a Contract and each such party forever waives any such defense.11.12ReleasesThe Seller (for itself and its heirs, assigns or executors) releases and forever discharges Buyer and all of itsSubsidiaries (including the Company Group) and Affiliates, and their respective directors, officers, agents, equityholders, employeesand other representatives (the “Buyer Released Parties”) from any and all claims, suits, demands, causes of action, contracts,covenants, obligations, debts, costs, expenses, attorneys’ fees, liabilities of whatever kind or nature in law or equity, by statute, courtorder, stipulation or otherwise whether now known or unknown, absolute or contingent, liquidated or unliquidated, suspected orunsuspected, and whether or not concealed or hidden (collectively, “Claims”), which have existed or may have existed, or which doexist, through the Closing Date of any kind, by reason of any matter, cause, act, omission or thing whatsoever existing or occurringprior to the Closing, except those Claims arising under this Agreement, the other Transaction Documents and the transactionscontemplated herein or therein. The Seller understands that this is a full and final release of all claims, demands, causes of action andliabilities of any nature whatsoever, whether or not known, suspected or claimed, that could have been asserted in any legal orequitable proceeding against the Buyer Released Parties by reason of any matter, cause, act, omission or thing whatsoever existing oroccurring prior to the Closing, except as expressly set forth in this Section 11.11(a). To the extent permitted by law, the Sellerexpressly waives all rights afforded by any statute which limits the effect of a release with respect to unknown claims. The Sellerunderstands the significance of its release of unknown claims and its waiver of statutory protection against a release of unknownclaims. Such released claims include, without in any way limiting the generality of the foregoing language, any and all claims ofemployment discrimination under any local, state, or federal law or ordinance, including, without limitation, Title VII or the CivilRights Act of 1964, as amended; the Civil Rights Act of 1991; or the Age Discrimination in Employment Act of 1967, as amended;the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act of 1993; theCivil Rights Act of 1966, as amended; the Worker Adjustment Retraining and Notification Act; the Employee Retirement IncomeSecurity Act of 1974; any applicable Executive Order Programs; the Fair Labor Standards Act; or their state or local counterparts; orunder any public policy, contract or tort, or under common law; or arising under any policies, practices or procedures of the CompanyGroup; or any claim for wrongful discharge, breach of contract, infliction of emotional distress, defamation; or any claim for costs,fees, or other expenses, including attorneys’ fees incurred in these matters.11.13No Third-Party BeneficiariesExcept as expressly provided in this Agreement, this Agreement is for the sole benefit of the Parties, their heirs,legal guardians and their successors and permitted assigns and nothing herein expressed or implied shall give or be construed to give toany Person, other than the Parties, their heirs, legal guardians, successors and permitted assigns, any legal or equitable rights hereunder,except that the Debt Financing Source shall be express third-party beneficiaries74of this Section 11.13 and Section 11.1, Section 11.9(b), Section 11.14, and Section 11.17, and each of such Sections shall expresslyinure to the benefit of the Debt Financing Source and the Debt Financing Source shall be entitled to rely on and enforce the provisionsof such Sections.11.14Specific PerformanceThe Parties agree that: (i) irreparable damage would occur if any provision of this Agreement were not performedby the parties in accordance with the terms hereof; (ii) there would be no adequate remedy at law or in damages to compensate for suchperformance failure; (iii) the Parties shall be entitled (without the requirement of proving harm or to post a bond or other security) to aninjunction or injunctions to prevent breaches of this Agreement, or to enforce specifically the performance of the terms and provisionshereof (including the right of the Seller to cause Buyer Parties to cause the transaction to be consummated on the terms set forth hereinand to cause the specific enforcement of Section 10.6), and (iv) no Party will oppose the granting of an injunction, specificperformance or other equitable relief on the basis that any Party has an adequate remedy at law or that any award of specificperformance or other equitable remedy is not an appropriate remedy for any reason at law or in equity. Without limitation of theforegoing, the Parties hereby further acknowledge and agree that prior to the Closing, the Seller shall be entitled to seek specificperformance to enforce specifically the terms and provisions of, and to prevent or cure breaches of the covenants required to beperformed by Buyer under this Agreement (including to cause Buyer to consummate the purchase of the Shares) in addition to anyother remedy to which the Seller is entitled hereunder. No Debt Financing Source shall be subject to any special consequential,punitive or indirect damages or any damages or a tortious nature.11.15Legal RepresentationBuyer and the Company hereby agree, on their own behalf, and each of their directors, members, partners, officersand employees, and each of their successors and assigns (all such parties, the “Waiving Parties”), that Robinson & Cole LLP (or asuccessor) shall not be prohibited from representing the Seller or any of its members or Affiliates, and each of their and their Affiliates’directors, members, partners, officers, employee or Affiliates in connection with any dispute, legal action or obligation arising out of orrelating to this Agreement or the other Transaction Documents (any such representation, the “Post-closing Representation”) as a resultof its prior representation of the Seller, the Company or any of its Subsidiaries, and each of Buyer and the Company Group on behalfof itself and the Waiving Parties hereby agrees not to assert any conflict of interest therefrom. Buyer and the Company acknowledgethat the foregoing provision applies whether or not Robinson & Cole LLP provides legal services to the Seller, and of its members, orthe Company or any of its Subsidiaries after the Closing Date. From and after the Closing neither Buyer, the Company, nor anyPerson purporting to act on behalf of or through Buyer or the Company or any of the Waiving Parties, will seek to obtain anyprivileged communications among the Company Group or the Seller and Robinson & Cole LLP, made in connection with thenegotiation, preparation, execution, delivery and performance under, or any dispute or legal action arising out of or relating to, thisAgreement, the other Transaction Documents or the transactions contemplated hereby or thereby. Each of Buyer and the Company(after the Closing), on behalf of itself and the Waiving Parties, will not assert any attorney-client privilege with respect to anycommunication between Robinson & Cole LLP and the Company, its Subsidiaries or the Seller or any member of the Seller occurringprior to the Closing in75connection with this Agreement, any other Transaction Document or any of the transactions contemplated herein or therein in anyPost-Closing Representation.11.16Incorporation of Appendices, Exhibits and SchedulesThe appendices, exhibits and schedules identified in this Agreement are incorporated herein by reference andmade a part hereof.11.17Debt Financing SourceNotwithstanding anything herein to the contrary, no Debt Financing Source shall have any Liability to the Seller,the Company and their respective subsidiaries, affiliates, directors, officers, employees, agents, partners, managers, members, orstockholders, and the Seller, the Company and their respective subsidiaries, affiliates, directors, officers, employees, agents, partners,managers, members, or stockholders (the “Seller Parties”) shall not have any claim (whether in tort, contract or otherwise) against theDebt Financing Source, and no Seller Party shall have any Liability to any Buyer Party or any Debt Financing Source, based on, inrespect of, or by reason of, the transactions contemplated hereby or by the Debt Financing or in respect of any oral representationsmade or alleged to be made in connection herewith or therewith. In no event shall the Seller, the Company and their respectivesubsidiaries, affiliates, directors, officers, employees, agents, partners, managers, members, or stockholders, and the Seller and theCompany agree not to and to cause their respective subsidiaries, affiliates, directors, officers, employees, agents, partners, managers,members, or stockholders not to, (a) seek to enforce this Agreement against, make any claims for breach of this Agreement against, orseek to recover monetary damages from, any Debt Financing Source in connection with this Agreement or (b) seek to enforce thecommitments against, make any claims for breach of the Debt Financing against, or seek to recover monetary damages from, orotherwise sue, the Debt Financing Source in connection with this Agreement or the Debt Financing or the obligations of DebtFinancing Source thereunder. Nothing in this Section 11.17 shall in any way limit or qualify the rights and obligations of the DebtFinancing Source and the other parties to the Debt Financing pursuant to the Debt Commitment Letter (or the definitive documentsentered into pursuant thereto) to the Buyer or to each other thereunder or in connection therewith.* * * *76 IN WITNESS WHEREOF, each of the Parties hereto has executed this Agreement, or has caused this Agreementto be executed by its respective officer thereunto duly authorized, all as of the day and year first above written.THE COMPANY:TALON INNOVATIONS CORPORATION By: /s/ Gregory J. OlsonName: Gregory J. OlsonTitle: Chief Executive Officer SELLER:TALON INNOVATIONS HOLDINGS LLC By: /s/ Gregory J. OlsonName: Gregory J. OlsonTitle: Chief Executive Officer BUYER:ICHOR HOLDINGS, LLCBy: /s/ Maurice CarsonName: Maurice CarsonTitle: President and Chief Financial Officer77BUYER GUARANTORS:ICHOR HOLDINGS, LTD.By: /s/ Maurice CarsonName: Maurice CarsonTitle: President and Chief Financial Officer ICHOR SYSTEMS, INC.By: /s/ Maurice CarsonName: Maurice CarsonTitle: President and Chief Financial Officer PRECISION FLOW TECHNOLOGIES, INC.By: /s/ Maurice CarsonName: Maurice CarsonTitle: President and Chief Financial Officer CAL-WELD, INC.By: /s/ Maurice CarsonName: Maurice CarsonTitle: President and Chief Financial Officer AJAX-UNITED PATTERNS & MOLDS, INC.By: /s/ Maurice CarsonName: Maurice CarsonTitle: President and Chief Financial Officer 78 Schedule AIchor Holdings, Ltd.Ichor Systems, Inc.Precision Flow Technologies, Inc.Cal-Weld, Inc.Ajax-United Patterns & Molds, Inc.79Exhibit 10.14 July 20, 2017 Mr. Kevin M. Canty[XXXXX][XXXXX] Dear Kevin, I am pleased to offer you the position of Chief Operating Officer with Ichor Systems, Inc. Should you accept our offer, your home office will be in Fremont,CA reporting directly to the Chief Executive Officer. The purpose of this letter is to confirm with you the specifics of your offer, consistent with the termsbelow. Start DateYour tentative date of hire is August 7, 2017. SalaryYour base salary will be $11,923.08 biweekly, which when annualized is equivalent to $310,000.00 per year. Work ClassificationYour position will be full-time, and is considered exempt for purposes of federal wage-hour law, which means that you will not be eligible for overtime pay. Incentive BonusYou are eligible to participate in the Company’s performance incentive program. This program is subject to the terms and conditions of the plan and at thediscretion of the Board of Directors. Your target bonus is 50% of your annual base salary. This bonus is based on companywide financial metrics andsuccessful completion of established MBOs. This plan is subject to change at any time at the Company’s discretion. Equity IncentiveYou will be eligible to participate in the Ichor Holdings, 2016 Omnibus Incentive Plan, and will be granted a non-statutory option to acquire 60,000 shares ofstock, and 20,000 RSUs, per the terms of the plan. You will receive plan documents under separate cover following the next meeting of the Board ofDirectors in August. BenefitsYour participation in the benefit programs, including medical and dental insurance, will begin the first day of the month following your date of hire as longas you have completed your enrollment as required. You will have thirty (30) days from your date of hire to enroll yourself and eligible dependents in thehealth and welfare benefit programs. You will also be eligible to participate in the 401(k) Retirement Savings Plan. Paid Time Off (PTO) You will accrue 3.70 hours of paid time off (PTO) time bi-weekly. This is equivalent to two (2) weeks and two (2) days of PTO time per year. Sick TimeUpon completion of ninety days (90) of employment, you will receive twenty-four hours (24) of sick time. Direct DepositAs a condition of employment, you will be required to accept payment of salary or wages by direct deposit or Pay Card. Background Check & Drug TestIchor Systems maintains a pre-employment drug and alcohol testing policy, a practice designed to prevent the hiring of individuals whose use of illegaldrugs or alcohol may indicate a potential for impaired or unsafe job performance. Applicants are required to complete the pre-employment drug screeningwithin 48 hours of offer acceptance. Failure to complete the drug screen within the specified time frame will nullify this offer of employment. This offer ofemployment is contingent upon successful completion of the drug screen and background checks. Per company policy, your employment with Ichor Systems is at will. This means that either you or Ichor Systems may terminate the employment relationshipat any time, with or without cause, with or without notice. With respect to the nature of your employment relationship with Ichor Systems, this constitutes the full, complete, and final agreement between you and IchorSystems. Additionally, no element or elements of the compensation plan listed above can be assigned or transferred by you to any other person, company, orentity of any type. As a new employee of Ichor Systems you will be required to complete an employee information sheet and an I-9 form. On your first day of work please bringappropriate documentation of proof that you are presently eligible to work in the United States for I-9 purposes. This offer of employment, if not previously accepted by you, will expire three (3) days from the date of this letter. If you wish to accept this offer, please sign, date, and return the enclosed copy of this letter to the Human Resources Department. Please sign, date and retain acopy for your records. Kevin, we are excited to have you join the Ichor team and trust that this letter finds you mutually excited about your new employment with us! Should youhave any questions, please contact me at [XXXXX] or email if that is more convenient. I welcome you to Ichor! Sincerely, /s/ Jennifer S. Speer Jennifer S. SpeerVice President of Human Resources ACKNOWLEDGEMENT I, the undersigned, understand and agree to the terms and conditions of employment set forth in this letter. I understand and agree that the terms of this lettersupersede any and all prior or contemporaneous agreements and/or promises concerning the terms of my employment and that there are no other promises,expressed or implied, concerning the terms of my employment with Ichor Systems, Inc., other than those expressly set forth or reference herein. /s/ Kevin Canty July 21, 2017Kevin Canty Date  Exhibit 10.15 November 9, 2017 Mr. Jeffrey Andreson[XXXXX][XXXXX] Dear Jeff, I am pleased to offer you the position of Chief Financial Officer with Ichor Systems, Inc. Should you accept our offer, your home office will be in Fremont,CA reporting directly to the Chief Executive Officer. The purpose of this letter is to confirm with you the specifics of your offer, consistent with the termsbelow. Start DateYour tentative date of hire is November 27, 2017 or other date as agreed upon. SalaryYour base salary will be $13,846.15 biweekly, which when annualized is equivalent to $360,000.00 per year. Work ClassificationYour position will be full-time, and is considered exempt for purposes of federal wage-hour law, which means that you will not be eligible for overtime pay. Sign On BonusYour offer of employment includes a one-time bonus in the amount of $200,000.00, as per the attached agreement. This bonus is payable in the first quarterof 2018 coincident with the incentive bonus plan payment schedule. Incentive BonusYou are eligible to participate in the Company’s performance incentive program. This program is subject to the terms and conditions of the plan and at thediscretion of the Board of Directors. Your target bonus is 65% of your annual base salary. This bonus is based on companywide financial metrics andsuccessful completion of established MBOs. This plan is subject to change at any time at the Company’s discretion. Equity IncentiveYou will be eligible to participate in the Ichor Holdings, 2016 Omnibus Incentive Plan, and will be granted a non-statutory option to acquire 54,000 shares ofstock, and 24,000 RSUs, per the terms of the plan. You will receive plan documents under separate cover following your date of hire. BenefitsYour participation in the benefit programs, including health and welfare, life and disability, along with other offerings, will begin the first day of the monthfollowing your date of hire as long as you have completed your enrollment as required. You will have thirty (30) days from your date of hire to enroll yourselfand eligible dependents in the health and welfare benefit programs. You will also be eligible to participate in the 401(k) Retirement Savings Plan. Paid Time Off (PTO)You will accrue 3.70 hours of paid time off (PTO) time bi-weekly. This is equivalent to two (2) weeks and two (2) days of PTO time per year. Sick TimeUpon completion of ninety days (90) of employment, you will receive twenty-four hours (24) of sick time. Direct DepositAs a condition of employment, you will be required to accept payment of salary or wages by direct deposit or Pay Card.  SeveranceIn the event that the company terminates your employment without cause within twelve (12) months of a change of control, subject in each case to yourexecution and non-revocation of a general release and waiver of claims in the form provided by the Company, you shall be entitled to receive a severancepayment equal to twelve (12) months of your base salary. “Cause” shall mean (a) any refusal by you to perform your reasonable duties and responsibilities in connection with your employment with Ichor Systems,provided that (i) the Company has delivered to you a written warning describing the occurrence of any such act(s) or omission(s) in reasonable detail and(ii)you have not cured the circumstances giving rise to the alleged Cause within fifteen (15) days following your receipt of such warning (iii) any act offraud, embezzlement, theft, or misappropriation by you or your commission of any other felony crime involving moral turpitude (iv) any gross negligence orwillful connection with your employment with Ichor Systems, or (iv) any material breach by you of any of the terms contained in this compensation letter. Background Check & Drug TestIchor Systems maintains a pre-employment drug and alcohol testing policy, a practice designed to prevent the hiring of individuals whose use of illegaldrugs or alcohol may indicate a potential for impaired or unsafe job performance. Applicants are required to complete the pre-employment drug screeningwithin 48 hours of offer acceptance. Failure to complete the drug screen within the specified time frame will nullify this offer of employment. This offer ofemployment is contingent upon successful completion of the drug screen and background checks. Per company policy, your employment with Ichor Systems is at will. This means that either you or Ichor Systems may terminate the employment relationshipat any time, with or without cause, with or without notice. With respect to the nature of your employment relationship with Ichor Systems, this constitutes the full, complete, and final agreement between you and IchorSystems. Additionally, no element or elements of the compensation plan listed above can be assigned or transferred by you to any other person, company, orentity of any type. As a new employee of Ichor Systems you will be required to complete an employee information sheet and an I-9 form. On your first day of work please bringappropriate documentation of proof that you are presently eligible to work in the United States for I-9 purposes. This offer of employment, if not previously accepted by you, will expire three (3) days from the date of this letter. If you wish to accept this offer, please sign, date, and return the enclosed copy of this letter to the Human Resources Department. Please sign, date and retain acopy for your records. Jeff, we are excited to have you join the Ichor team and trust that this letter finds you mutually excited about your new employment with us! Should you haveany questions, please contact me at [XXXXX] or email if that is more convenient. I welcome you to Ichor! Sincerely, /s/ Jennifer S. Speer Jennifer S. SpeerVice President of Human Resources ACKNOWLEDGEMENT I, the undersigned, understand and agree to the terms and conditions of employment set forth in this letter. I understand and agree that the terms of this lettersupersede any and all prior or contemporaneous agreements and/or promises concerning the terms of my employment and that there are no other promises,expressed or implied, concerning the terms of my employment with Ichor Systems, Inc., other than those expressly set forth or reference herein. /s/ Jeffrey Andreson November 10, 2017Jeffrey Andreson Date Exhibit 10.16THIRD AMENDMENT TO CREDIT AGREEMENT THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made as of December 11, 2017 byand among ICHOR HOLDINGS, LLC, a Delaware limited liability company (“Ichor Holdings”), ICHOR SYSTEMS, INC., aDelaware corporation (“Ichor Systems”), PRECISION FLOW TECHNOLOGIES, INC., a New York corporation (“PrecisionFlow”), AJAX-UNITED PATTERNS & MOLDS, INC., a California corporation (“Ajax”), CAL-WELD, INC., a Californiacorporation (“Cal-Weld”), TALON INNOVATIONS CORPORATION, a Minnesota corporation (“Talon”) and TALONINNOVATIONS (FL) CORPORATION, a Florida corporation (“Talon (FL)” and together with Talon, collectively, the “Targets”and each, a “Target”, and collectively with Ajax, Ichor Holdings, Ichor Systems and Precision Flow, the “Borrowers”, and each a“Borrower”), ICICLE ACQUISITION HOLDING B.V. a Netherlands private company with limited liability (“Holdings”) andICHOR SYSTEMS SINGAPORE PTE. LTD., a Singapore private limited company (“Ichor Singapore” and together with Holdings,the “Guarantors”), BANK OF AMERICA, N.A., as administrative agent (the “Administrative Agent”), and the financial institutionssignatory hereto (the “Lenders”).RECITALSWHEREAS, the Administrative Agent, certain financial institutions, and the Borrowers entered into that certain CreditAgreement dated as of August 11, 2015 (as amended, supplemented, restated, amended and restated or otherwise modified from timeto time, the “Existing Credit Agreement”);WHEREAS, Ichor Holdings has entered into that certain Stock Purchase Agreement dated as of November 3, 2017 by andamong Talon, Talon Innovations Holdings LLC and Ichor Holdings (together with the exhibits and disclosure schedules thereto, the“Acquisition Agreement”), pursuant to which Ichor Holdings has agreed to purchase all of the issued and outstanding stock of theTargets (the purchase and sale of the Targets as contemplated by the Acquisition Agreement is herein referred to as the “Acquisition”);WHEREAS, in connection with the Acquisition, the Borrowers have requested, and the Lenders are willing to makeavailable to the Borrowers, Incremental Commitments on and subject to the terms and conditions set forth herein;WHEREAS, the Borrowers wish to amend the Existing Credit Agreement and the Administrative Agent and the Lendersparty hereto are willing to agree to such request on and subject to the terms and conditions set forth in this Amendment; andWHEREAS, this Amendment constitutes a Loan Document and these Recitals shall be construed as part of thisAmendment.AGREEMENT  In consideration of the matters set forth in the recitals and the covenants and provisions herein set forth, and other valuableconsideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:1.Definitions. Capitalized terms used but not defined herein are used as defined in the Existing Credit Agreement, asamended by this Amendment (the “Credit Agreement”). 2.Amendment to Credit Agreement. Upon the Effective Date (as defined herein), the Existing Credit Agreement is herebyamended as follows:(a)The following new definitions are hereby inserted in Section 1.1 of the Existing Credit Agreement inappropriate alphabetical order as follows:“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject toTitle I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose assetsinclude (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section4975 of the Code) the assets of any such “employee benefit plan” or “plan”.“Bona Fide Lending Affiliate” means any debt fund affiliate of such entities mentioned in clause (a) or(b) of the definition of Disqualified Institution that is primarily engaged in, or advises funds or otherinvestment vehicles that are engaged in, making, purchasing, holding or otherwise investing incommercial loans, notes, bonds and similar extensions of credit or securities in the ordinary course of itsbusiness and whose managers are not involved with the equity investment decisions of such competitoror affiliate.“Excluded Parties” means any Affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated,SunTrust Robinson Humphrey, Inc., SG Americas Securities, LLC, Bank of America, N.A., SunTrustBank or Societe Generale that is engaged directly or indirectly in a sale of the Targets and theirSubsidiaries as sell-side representative.“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as anysuch exemption may be amended from time to time.“Third Amendment” means that certain Third Amendment to Credit Agreement dated as of the ThirdAmendment Effective Date among the Administrative Agent, the Borrowers and the Lenders partythereto.“Third Amendment Effective Date” means December 11, 2017.“Third Amendment Incremental Term Loans” has the meaning specified in the Third Amendment. - 2 -  (b)The following definitions appearing in Section 1.1 of the Existing Credit Agreement are herebyamended and restated in their entirety as follows:“Applicable Rate” means, for any day, the rate per annum set forth below opposite the applicable Levelthen in effect (based on the Consolidated Leverage Ratio), it being understood that the Applicable Ratefor (a) Revolving Loans that are Base Rate Loans shall be the percentage set forth under the column“Revolving Loans” and “Base Rate”, (b) Revolving Loans that are Eurodollar Rate Loans shall be thepercentage set forth under the column “Revolving Loans” and “Eurodollar Rate & Letter of CreditFee”, (c) that portion of the Term Loan comprised of Base Rate Loans shall be the percentage set forthunder the column “Term Loan” and “Base Rate”, (d) that portion of the Term Loan comprised ofEurodollar Rate Loans shall be the percentage set forth under the column “Term Loan” and “EurodollarRate & Letter of Credit Fee”, (e) the Letter of Credit Fee shall be the percentage set forth under thecolumn “Eurodollar Rate & Letter of Credit Fee”, and (f) the commitment fee shall be the percentageset forth under the column “Commitment Fee”:Applicable RateLevelConsolidatedLeverageRatioEurodollar Rate for RevolvingLoans and Term Loans &Letter of Credit FeeBase Rate forRevolving Loansand Term Loans CommitmentFee1≥ 1.50x2.50%1.50%0.45%2≥ 1.00x but <1.50x2.25%1.25%0.40%3< 1.00x2.00%1.00%0.35% Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated LeverageRatio shall become effective as of the first Business Day immediately following the date a ComplianceCertificate is delivered pursuant to Section 6.02(b); provided, however, that if a Compliance Certificateis not delivered when due in accordance with such Section, then, upon the request of the RequiredLenders, Pricing Level 1 shall apply, in each case as of the first Business Day after the date on whichsuch Compliance Certificate was required to have been delivered and in each case shall remain in effectuntil the first Business Day following the date on which such Compliance Certificate is delivered. Inaddition, at all times while the Default Rate is in effect, the highest rate set forth in each column of theApplicable Rate shall apply.Notwithstanding anything to the contrary contained in this definition, (a) the determination of theApplicable Rate for any period shall be subject to the provisions of Section 2.10 and (b) the initialApplicable Rate shall be set - 3 -  forth in Level 1 until the first Business Day immediately following the date a Compliance Certificate isdelivered pursuant to Section 6.02(b) for the first fiscal quarter end to occur following the ThirdAmendment Effective Date to the Administrative Agent. Any adjustment in the Applicable Rate shallbe applicable to all Credit Extensions then existing or subsequently made or issued.“Disqualified Institution” means (a) those Persons that are bona fide competitors of any Loan Party ortheir respective Subsidiaries (or Affiliates of any such competitors (other than Bona Fide LendingAffiliates) that are (x) reasonably identifiable as Affiliates solely on the basis of similarity of name(provided that the Administrative Agent shall have no obligation to carry out due diligence in order toidentify such Affiliates) or (y) identified by the Borrowers in writing from time to time), (b) those banks,financial institutions and other Persons separately identified by Borrowers to the Administrative Agentin writing prior to November 3, 2017 (such list, the “Excluded Persons List”) (and, in each case, suchspecified entities’ Affiliates (other than Bona Fide Lending Affiliates) that are reasonably identifiable asAffiliates solely on the basis of similarity of name (provided that the Administrative Agent shall have noobligation to carry out due diligence in order to identify such Affiliates)), (c) any Person(s) that areengaged as principals primarily in private equity, mezzanine financing or venture capital (or Affiliates ofsuch Person(s) that are (x) reasonably identifiable as Affiliates solely on the basis of similarity of name(provided that the Administrative Agent shall have no obligation to carry out due diligence in order toidentify such Affiliates) or (y) identified by the Borrowers in writing from time to time) or (d) ExcludedParties.“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules andregulations promulgated thereunder.(c)A new clause (e) is inserted in Section 2.07 of the Existing Credit Agreement immediately followingclause (d) in Section 2.07 as follows:(e) Third Amendment Incremental Term Loans. The Borrowers shall repay to the applicable Term ALenders the aggregate principal amount of all Third Amendment Incremental Term Loans outstandingon the following dates in the respective amounts set forth opposite such dates (which amounts shall bereduced as a result of the application of prepayments in accordance with the order of priority set forth inSection 2.05):DateAmountMarch 31, 2018$1,770,000June 30, 2018$1,770,000September 30, 2018$1,770,000 - 4 -  DateAmountDecember 31, 2018$1,770,000March 31, 2019$1,770,000June 30, 2019$1,770,000September 30, 2019$1,770,000December 31, 2019$1,770,000March 31, 2020$1,770,000June 30, 2020$1,770,000Maturity Date$102,300,000provided, however, that the final principal repayment installment of the Third Amendment IncrementalTerm Loans shall be repaid on the Maturity Date for the Third Amendment Incremental Term Facilityand in any event shall be in an amount equal to the aggregate principal amount of all Third Amendment Incremental Term Loans outstanding on such date. (d)Section 2.15(a) of the Existing Credit Agreement is hereby amended and restated in its entirety asfollows:(a) Request for Increase. The Borrowers may by written notice to the Administrative Agent on notmore than four (4) occasions after the Second Amendment Effective Date elect to request (x) prior tothe Maturity Date for the Revolving Credit Facility, an increase to the existing Revolving CreditCommitments (each, an “Incremental Revolving Credit Commitment”) and/or (y) prior to the MaturityDate for the Term A Loans, the establishment of one (1) or more new term loan commitments for anadditional Class of term loans or as an increase to an existing Class of Term Loans (each, an“Incremental Term Commitment”), by an aggregate amount after the Third Amendment Effective Datenot in excess of $50,000,000; provided that no more than $25,000,000 of such amount may beIncremental Revolving Credit Commitments. Each Incremental Commitment shall be in a minimumamount of $5,000,000. At the time of sending such notice, the Borrowers (in consultation with theAdministrative Agent) shall specify the time period within which each Lender is requested to respond(which shall in no event be less than ten (10) Business Days from the date of delivery of such notice tothe Lenders or such shorter period as the Borrowers and the Administrative Agent may agree).(e)Section 6.01 of the Existing Credit Agreement is hereby amended by inserting the following at the endthereof:The obligations in Sections 6.01(a), (b) and (c) above may be satisfied by furnishing the applicablefinancial statements of Parent and its Subsidiaries, so long as, in each case, such information isaccompanied by unaudited consolidating information, in form and substance reasonably acceptable to - 5 -  the Administrative Agent, that explains in reasonable detail the differences between the informationrelating to Parent and its consolidated Subsidiaries, on the one hand, and the information relating to theHoldings and its consolidated Subsidiaries on a standalone basis, on the other hand. In addition, to theextent that, (x) for any four fiscal quarter period ending as of the last day of (i) any fiscal year for whichfinancial statements are required to be delivered pursuant to Section 6.01(a) or (ii) any fiscal quarter forwhich financial statements are required to be delivered pursuant to Section 6.01(b), any direct orindirect parent of Holdings that is a Subsidiary of Parent directly generates in excess of 10% of the salesof Parent and its Subsidiaries on a consolidated basis or (y) as of the last day of (i) any fiscal year forwhich financial statements are required to be delivered pursuant to Section 6.01(a) or (ii) any fiscalquarter for which financial statements are required to be delivered pursuant to Section 6.01(b), anydirect or indirect parent of Holdings that is a Subsidiary of Parent directly holds in excess of 10% of thetotal assets of Parent and its Subsidiaries on a consolidated basis, the foregoing reports shall also beaccompanied by unaudited consolidating information, in form and substance reasonably acceptable tothe Administrative Agent, that presents, in reasonable detail, the consolidating results of such parentcompany.(f)Section 7.03(g)(iv) of the Existing Credit Agreement is hereby amended and restated in its entirety asfollows:(iv) (A) immediately before and immediately after giving pro forma effect to any such purchase or otheracquisition, no Default shall have occurred and be continuing and (B) immediately after giving effect tosuch purchase or other acquisition, (x) the Loan Parties and their Subsidiaries shall be in pro formacompliance with the lesser of (1) a Consolidated Leverage Ratio of 2.25 to 1.00 and (2) the covenantset forth in Section 7.11(a) and (y) Loan Parties and their Subsidiaries shall be in pro forma compliancewith the covenants set forth in Section 7.11(b), each such compliance to be determined on the basis ofthe financial information most recently delivered to the Administrative Agent and the Lenders pursuantto Section 6.01(a) or (b) as though such purchase or other acquisition had been consummated as of thefirst day of the fiscal period covered thereby; provided that the aggregate amount of such Investmentsby Loan Parties in assets that will not (or will not become) owned by a Loan Party or in Equity Interestsof Persons that will not become Loan Parties shall not exceed, for all such Investments made after theThird Amendment Effective Date, $10,000,000 plus any portion of Cumulative Amount used to makesuch acquisition; and(g)Section 7.03(g)(v) of the Existing Credit Agreement is hereby amended by deleting the reference to“this clause (vi)” therein and replacing it with “this Section 7.03(g).” - 6 -  (h)A new Section 9.13 is hereby inserted immediately following Section 9.12 of the Existing CreditAgreement as follows:9.13ERISA Matters.(a) Each Lender (x) represents and warrants, as of the Third Amendment Effective Date, to, and (y)covenants, from the Third Amendment Effective Date to the date such Person ceases being a Lenderparty hereto, that at least one of the following is and will be true:(i) such Lender is not using “plan assets” (within the meaning of 29 CFR § 2510.3-101, asmodified by Section 3(42) of ERISA) of one or more Benefit Plans in connection with the Loans, theLetters of Credit or the Commitments,(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a classexemption for certain transactions determined by independent qualified professional asset managers),PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts),PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separateaccounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investmentfunds) or PTE 96-23 (a class exemption for certain transactions determined by in-house assetmanagers), is applicable, and the conditions of such exemption have been satisfied, with respect to suchLender’s entrance into, participation in, administration of and performance of the Loans, the Letters ofCredit, the Commitments and this Agreement, or(iii) (A) such Lender is an investment fund managed by a “Qualified Professional AssetManager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional AssetManager made the investment decision on behalf of such Lender to enter into, participate in, administerand perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entranceinto, participation in, administration of and performance of the Loans, the Letters of Credit, theCommitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I ofPTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part Iof PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administrationof and performance of the Loans, the Letters of Credit, the Commitments and this Agreement.(b) In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to aLender or such Lender has not provided another representation, warranty and covenant as provided insub-clause (iv) in the - 7 -  immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date suchPerson became a Lender party hereto, to, and (y) covenants, from the date such Person became aLender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, theAdministrative Agent and its respective Affiliates, and not, for the avoidance of doubt, to or for thebenefit of the Borrower or any other Loan Party, that:(i) none of the Administrative Agent or any of its respective Affiliates is a fiduciary withrespect to the assets of such Lender (including in connection with the reservation or exercise of anyrights by the Administrative Agent under this Agreement, any Loan Document or any documentsrelated to hereto or thereto),(ii) the Person making the investment decision on behalf of such Lender with respect to theentrance into, participation in, administration of and performance of the Loans, the Letters of Credit, theCommitments and this Agreement is independent (within the meaning of 29 CFR § 2510.3-21) and is abank, an insurance carrier, an investment adviser, a broker-dealer or other person that holds, or hasunder management or control, total assets of at least $50 million, in each case as described in 29 CFR §2510.3-21(c)(1)(i)(A)-(E),(iii) the Person making the investment decision on behalf of such Lender with respect to theentrance into, participation in, administration of and performance of the Loans, the Letters of Credit, theCommitments and this Agreement is capable of evaluating investment risks independently, both ingeneral and with regard to particular transactions and investment strategies (including in respect of theObligations),(iv) the Person making the investment decision on behalf of such Lender with respect to theentrance into, participation in, administration of and performance of the Loans, the Letters of Credit, theCommitments and this Agreement is a fiduciary under ERISA or the Code, or both, with respect to theLoans, the Letters of Credit, the Commitments and this Agreement and is responsible for exercisingindependent judgment in evaluating the transactions hereunder, and(v) no fee or other compensation is being paid directly to the Administrative Agent or any ofits respective Affiliates for investment advice (as opposed to other services) in connection with theLoans, the Letters of Credit, the Commitments or this Agreement.(c) The Administrative Agent hereby informs the Lenders that each such Person is notundertaking to provide impartial investment advice, or to - 8 -  give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and thatsuch Person has a financial interest in the transactions contemplated hereby in that such Person or anAffiliate thereof (i) may receive interest or other payments with respect to the Loans, the Letters ofCredit, the Commitments and this Agreement, (ii) may recognize a gain if it extended the Loans, theLetters of Credit or the Commitments for an amount less than the amount being paid for an interest inthe Loans, the Letters of Credit or the Commitments by such Lender or (iii) may receive fees or otherpayments in connection with the transactions contemplated hereby, the Loan Documents or otherwise,including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwritingfees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimumusage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees,processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination feesor fees similar to the foregoing.(i)Clause (viii) in Section 11.06(b) of the Existing Credit Agreement is hereby amended in its entirety asfollows:(viii) Any Assignment and Assumption entered into in connection with an assignment of Term Loansmust specify whether or not the Term Loan to be assigned is a 2017 Incremental Term Loan or a ThirdAmendment Incremental Term Loan.(j)Section 11.06(d) of the Existing Credit Agreement is hereby amended by deleting the reference to“Section 10.08” therein and replacing it with “Section 11.08.”(k)A new Section 11.23 is hereby added to the Existing Credit Agreement as follows:11.23California Judicial Reference. Notwithstanding anything to the contrary contained in thisAgreement, if any action or proceeding is filed in a court of the State of California by or against any party heretoin connection with any of the transactions contemplated by this Agreement or any other Loan Document, (a) thecourt shall, and is hereby directed to, make a general reference pursuant to California Code of Civil ProcedureSection 638 to a referee (who shall be a single active or retired judge) to hear and determine all of the issues insuch action or proceeding (whether of fact or of law) and to report a statement of decision, provided that at theoption of any party to such proceeding, any such issues pertaining to a “provisional remedy” as defined inCalifornia Code of Civil Procedure Section 1281.8 shall be heard and determined by the court, and (b) withoutlimiting the generality of Section 11.04, the Borrowers shall be solely responsible to pay all fees and expenses ofany referee appointed in such action or proceeding. - 9 -  (l)Exhibit E (Form of Assignment and Assumption) to the Existing Credit Agreement is hereby amendedand restated in its entirety as the new Exhibit E attached hereto as Annex I.3.Incremental Commitments(a)Pursuant to Section 2.15 of the Credit Agreement and subject to the terms and conditions set forthherein, each Lender severally agrees to make an Incremental Term Loan to the Borrower on the Effective Date in the amount set forthopposite its name on Exhibit A hereto under the heading “Incremental Term Commitment” (such loans being the “Third AmendmentIncremental Term Loans”).(b)Subject to Section 3(e) below, the procedure for making such Third Amendment Incremental TermLoans shall be as set forth in Section 2.02 of the Credit Agreement, the terms of which section are incorporated herein mutatismutandis.(c)The Third Amendment Incremental Term Loans made pursuant to this Section 3 shall be treated as anincrease in the existing Class of Term A Loans and the terms and provisions of such Third Amendment Incremental Term Loans shallbe identical to those of the Term A Loans; provided that, pursuant to Section 2.15(g)(iii) of the Credit Agreement, the amortization ofthe Third Amendment Incremental Term Loans shall be as set forth in Section 2.07(e) of the Credit Agreement (and not as set forth inSection 2.07(a) of the Existing Credit Agreement). (d)The Third Amendment Incremental Term Loans made pursuant to Section 3(a)(i) hereof shall constitutea “Term Loan” for all purposes of the Credit Agreement from and after the Third Amendment Effective Date and rank pari passu in allrespects with all other Term Loans, regardless of when made.(e)No amount of any Third Amendment Incremental Term Loans made pursuant to Section 3(a) hereofthat is repaid or prepaid by the Borrowers may be reborrowed.(f)For the avoidance of doubt, the Third Amendment Incremental Term Loans made pursuant to Section3(a)(i) hereof shall not reduce the Incremental Commitment availability set forth in Section 2.15(a) of the Credit Agreement (asamended pursuant to this Amendment).4.[Reserved] 5.Conditions to Effectiveness. Upon the satisfaction (or waiver) of each of the following conditions, this Amendment shallbe deemed effective as of the date hereof (the “Effective Date”):(a)receipt by the Administrative Agent of counterparts of this Amendment executed and delivered by theAdministrative Agent, the Borrowers and the Lenders; - 10 -  (b)to the extent invoiced at least three (3) Business Days prior to the Effective Date, payment by theBorrowers of all expenses to be paid to the Administrative Agent and Lenders in connection with the Credit Agreement, thisAmendment and the other Loan Documents (including legal fees) and the deliverables described in this Section 5;(c)receipt by each Lender requesting the same at least three (3) Business Days prior to the Effective Date,of a Term Loan Note executed and delivered by the Borrowers, reflecting the increased Term Loan principal amount of such Lenderresulting herefrom;(d)receipt by the Administrative Agent of such written resolutions, minutes of meetings, certificates ofresolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party and Target asthe Administrative Agent may require (i) approving the entry into this Agreement and the other Loan Documents to which such LoanParty or Target is a party or is to be a party and (ii) evidencing the identity, authority and capacity of each Responsible Officer thereofauthorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Partyor Target is a party or is to be a party; provided that the Administrative Agent and Lenders party hereto hereby agree to waive any suchdeliverables of each Loan Party that is not a U.S. Loan Party;(e)to the extent applicable in the relevant jurisdiction, receipt by the Administrative Agent of suchdocuments and certifications as the Administrative Agent may reasonably require to evidence that each Loan Party and Target is dulyincorporated, organized or formed, is validly existing, in good standing and qualified to engage in business in each jurisdiction whereits ownership, lease or operation of properties or the conduct of its business requires such qualification; provided that theAdministrative Agent and Lenders party hereto hereby agree to waive any such deliverables of each Loan Party that is not a U.S. LoanParty;(f)receipt by the Administrative Agent of a favorable opinion of (i) Kirkland & Ellis LLP, counsel to theLoan Parties, (ii) Fredrikson & Byron, P.A., special Minnesota counsel to Talon and (iii) Foley & Lardner LLP, special Floridacounsel to Talon (FL), in each case, addressed to the Administrative Agent and each Lender, as to such matters concerning the LoanParties and the Loan Documents as the Required Lenders may reasonably request;(g)receipt by the Administrative Agent of a duly executed and delivered certificate of a ResponsibleOfficer of the Borrowers, certifying that, before and after giving effect to borrowing of the Incremental Term Loans pursuant toSection 3 hereof and the use of proceeds thereof, each of the following are satisfied (for purposes of the following subclauses of thisclause (g), terms used but not otherwise defined herein or in the Credit Agreement shall have such meanings assigned to them in thatcertain Commitment Letter (the “Commitment Letter”) dated November 3, 2017, among Holdings, Merrill Lynch, Pierce, Fenner &Smith Incorporated, SunTrust Robinson Humphrey, Inc., SG Americas Securities, LLC, Bank of America, N.A., SunTrust Bank andSociete Generale):(i)the conditions set forth in Section 7.03(g) of the Credit Agreement have beensatisfied with respect to the Acquisition such that the - 11 -  Acquisition is a Permitted Acquisition; provided, that the Administrative Agent and the Lenders herebyagree that certifications to be delivered pursuant to Section 7.03(g)(v) may be delivered substantiallysimultaneously with the consummation of the Permitted Acquisition;(ii)the Specified Acquisition Agreement Representations are true and correct to theextent required by the Certain Funds Provision and the Specified Representations are true and correct inall material respects (except in the case of any Specified Acquisition Agreement Representation orSpecified Representation which expressly relates to a given date or period, such representation andwarranty is true and correct to the extent required as of the respective date or for the respective period,as the case may be); provided that to the extent that any of the Specified Representations are qualifiedby or subject to a “material adverse effect”, “material adverse change” or similar term or qualification,the definition thereof shall be a Material Adverse Effect (as defined in the Acquisition Agreement) forpurposes of any such representations and warranties made or deemed made on, or as of, the ThirdAmendment Effective Date (or any date prior thereto);(iii)substantially concurrently with the Third Amendment Effective Date, theAcquisition will be consummated, in all material respects, in accordance with the terms of theAcquisition Agreement, as amended or otherwise modified, but without giving effect to anyamendments, waivers, consents or other modifications thereto by the Borrowers that are materiallyadverse to the interests of the Commitment Parties (in their capacities as such) without the consent of theCommitment Parties, such consent not to be unreasonably withheld, delayed or conditioned (it beingunderstood that (a) any modification, amendment, consent or waiver to or under the definition ofMaterial Adverse Effect in the Acquisition Agreement shall be deemed to be material and adverse to theinterests of the Commitment Parties, (b) any decrease in the purchase price shall not be materiallyadverse to the interests of the Commitment Parties so long as the amount of such reduction is applied toreduce the principal amount of the Incremental Loans, (c) any increase in the purchase price shall not bematerially adverse to the Commitment Parties if funded with equity and (d) other than as set forth inclause (a) above, the granting of any consent under the Acquisition Agreement that is not materiallyadverse to the interests of the Commitment Parties shall not otherwise constitute an amendment orwaiver);(iv)since November 3, 2017, there has not occurred a Material Adverse Effect (asdefined in the Acquisition Agreement); and - 12 -  (v)no Event of Default under Section 8.01(a), Section 8.01(f) or Section 8.01(g) ofthe Existing Credit Agreement exists or is continuing.(h)receipt by the Administrative Agent of a Request for Credit Extension in accordance with therequirements of the Credit Agreement;(i)on the Third Amendment Effective Date, after giving effect thereto, including the borrowing of theThird Amendment Incremental Term Loans, all Indebtedness of the Targets outstanding as of immediately prior to such date and setforth on Schedule 3.1(j) of the Acquisition Agreement (as defined in the Commitment Letter) shall be repaid or terminated;(j)the Administrative Agent shall have received a joinder agreement duly executed and delivered by theTargets substantially in the form attached hereto as Exhibit B; provided, however, that this condition shall be subject in all respects tothe Certain Funds Provision (as defined in the Commitment Letter);(k)the Administrative Agent and the Lenders shall have received fees in such amounts in accordance withthe terms of that certain Third Amendment Fee Letter dated as of November 3, 2017 among the Borrowers, the Administrative Agentand the Lenders;(l)receipt by the Administrative Agent of a certificate of the chief financial officer (or other officer withreasonably equivalent responsibilities) of Ichor Systems, Inc. in the form delivered on July 27, 2017 in connection with the SecondAmendment, certifying that the Loan Parties and their Subsidiaries, taken as a whole, after giving effect to the Transactions (as definedin the Commitment Letter), are Solvent;(m)receipt by the Administrative Agent of unaudited consolidated balance sheets and related statements ofincome and cash flows of the Targets for each fiscal month ended after August 31, 2017 and at least thirty (30) days prior to the ThirdAmendment Effective Date; and(n)receipt by the Administrative Agent, no later than three (3) Business Days in advance of the ThirdAmendment Effective Date, all documentation and other information required by regulatory authorities under applicable “know yourcustomer” and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act, that has been reasonablyrequested by the Commitment Parties at least ten (10) days in advance of the Third Amendment Effective Date; provided, that theAdministrative Agent shall have received a signed flow of funds with respect to the payment of the proceeds of the Third AmendmentIncremental Term Loans no later than one (1) Business Day in advance of the Third Amendment Effective Date.6.Effect of the Amendment; Loan Document. Except as expressly provided herein, the Credit Agreement and theother Loan Documents shall remain unmodified and in full force and effect. Except as expressly set forth herein, this Amendment shallnot be deemed (a) to be a waiver of, or consent to, a modification or amendment of, any other term or condition of the Credit - 13 -  Agreement or any other Loan Document, (b) to prejudice any other right or rights which Administrative Agent or the Lenders maynow have or may have in the future under or in connection with the Credit Agreement or the other Loan Documents or any of theinstruments or agreements referred to therein, as the same may be amended, restated, supplemented or otherwise modified from time totime, (c) to be a commitment or any other undertaking or expression of any willingness to engage in any further discussion withObligors or any other Person with respect to any waiver, amendment, modification or any other change to the Credit Agreement or theLoan Documents or any rights or remedies arising in favor of the Lenders or Administrative Agent, or any of them, under or withrespect to any such documents or (d) to be a waiver of, or consent to or a modification or amendment of, any other term or condition ofany other agreement by and among Obligors, on the one hand, and Administrative Agent or any other Lender, on the otherhand. References in the Credit Agreement to “this Agreement” (and indirect references such as “hereunder”, “hereby”, “herein”, and“hereof”) and in any Loan Document to the Credit Agreement shall be deemed to be references to the Credit Agreement as modifiedhereby. This Amendment is a Loan Document, and, together with the other Loan Documents, incorporates all negotiations of theparties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to thesubject matter hereof. 7.Reaffirmation. Each Loan Party as debtor or guarantor hereby (i) ratifies and reaffirms all of its payment and performanceobligations, contingent or otherwise, under each of the Loan Documents to which it is a party, (ii) to the extent such Loan Partyguaranteed the Obligations under or with respect to the Loan Documents, ratifies and reaffirms such guarantee and (iii) to the extentsuch Loan Party has granted a security interest in any Collateral in support of the Obligations under or with respect to the LoanDocuments, ratifies and reaffirms such grant of Collateral.8.Cost and Expenses. The Borrowers hereby affirm their obligations under Section 11.04 of the Credit Agreement toreimburse the Administrative Agent for all reasonable out-of-pocket expenses incurred by the Administrative Agent in connection withthe preparation, negotiation, execution and delivery of this Amendment, including but not limited to the reasonable fees, charges anddisbursements of attorneys for the Administrative Agent with respect thereto. 9.Counterparts. This Amendment may be executed in two or more counterparts, each of which shall constitute an original,but all of which when taken together shall constitute one instrument. Delivery of an executed counterpart of this Amendment byfacsimile or PDF shall be effective as delivery of an original counterpart.10.Headings. The headings and captions of this Amendment are for the purposes of reference only and shall not affect theconstruction of, or be taken into consideration in interpreting, this Amendment.11.Release and Waiver. The Borrowers each do hereby release the Administrative Agent and each of the Lenders and eachof their officers, directors, employees, agents, attorneys, personal representatives, successors, predecessors and assigns from all mannerof actions, cause and causes of action, suits, deaths, sums of money, accounts, reckonings, bonds, bills, specialties, - 14 -  covenants, controversies, agreements, promises, variances, trespasses, damages, judgments, executions, claims and demands,whatsoever, in law or in equity, and particularly, without limiting the generality of the foregoing, in connection with the LoanDocuments and any agreements, documents and instruments relating to the Loan Documents and the administration of the LoanDocuments, all indebtedness, obligations and liabilities of the Borrowers to the Administrative Agent or any Lender and anyagreements, documents and instruments relating to the Loan Documents (collectively, the “Claims”), which the Borrowers now haveagainst the Administrative Agent or any Lender or ever had, or which might be asserted by their heirs, executors, administrators,representatives, agents, successors, or assigns based on any Claims which exist on or at any time prior to the date of thisAmendment. The Borrowers expressly acknowledge and agree that they have been advised by counsel in connection with thisAmendment and that they each understand that this Section 11 constitutes a general release of the Administrative Agent and theLenders and that they each intend to be fully and legally bound by the same. The Borrowers further expressly acknowledge and agreethat this general release shall have full force and effect notwithstanding the occurrence of a breach of the terms of this Amendment oran Event of Default or Default under the Credit Agreement.12.Further Assurances. Each Borrower agrees to execute and deliver in form and substance reasonably satisfactory to theLenders such further documents, instruments, amendments, financing statements and to take such further action, as may be necessaryfrom time to time to perfect and maintain the liens and security interests created by the Loan Documents, as amended hereby.13.APPLICABLE LAW. THIS AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OFACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATINGTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BEGOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.[signature pages follow] - 15 -  The parties hereto have caused this Amendment to be executed by their duly authorized officers, all as of the day and yearfirst above written.BORROWERS:ICHOR HOLDINGS, LLC.ICHOR SYSTEMS, INC.PRECISION FLOW TECHNOLOGIES, INC.AJAX-UNITED PATTERNS & MOLDS, INC.CAL-WELD, INC.TALON INNOVATIONS CORPORATIONTALON INNOVATIONS (FL) CORPORATION By: /s/ Maurice CarsonName: Maurice CarsonTitle: President  GUARANTORS:ICICLE ACQUISITION HOLDING B.V.By: /s/ Maurice CarsonName: Maurice CarsonTitle: Director ABy: /s/ Arnaud van der WerfName: Arnaud van der WerfTitle: Director B ICHOR SYSTEMS SINGAPORE PTE. LTD. By: /s/ Maurice CarsonName: Maurice CarsonTitle: Director  BANK OF AMERICA, N.A., as Administrative AgentBy: /s/ Christine TrotterName: Christine TrotterTitle: Assistant Vice President BANK OF AMERICA, N.A., as a Lender,L/C Issuer and Swing Line LenderBy: /s/ Frank ByrneName: Frank ByrneTitle: Sr. Vice President SUNTRUST BANK, as a LenderBy: /s/ Michael KimName: Michael KimTitle: Vice President  SOCIETE GENERALE, as a Lender By: /s/ Richard O. KnowltonName: Richard O. KnowltonTitle: Managing Director EXHIBIT AINCREMENTAL COMMITMENTSLenderIncremental Term CommitmentBank of America, N.A.$40,000,000SunTrust Bank$40,000,000Societe Generale$40,000,000Total$120,000,000  EXHIBIT BFORM OF JOINDER AGREEMENT See attached. Exhibit 21.1 Name of Subsidiary Jurisdiction of Incorporation,Organization, or Formation Ichor Holdings, Ltd. ScotlandFP-Ichor, Ltd. Cayman IslandsIcicle Acquisition Holding Co-op NetherlandsIcicle Acquisition Holding, B.V. NetherlandsIchor Holdings, LLC DelawareIchor Systems Singapore, PTE Ltd. SingaporeIchor Systems Ltd. ScotlandPrecision Flow Technologies, Inc. New YorkAjax-United Patterns & Molds, Inc. CaliforniaIchor Systems, Inc. DelawareIchor Systems Malaysia Sdn Bhd MalaysiaCal-Weld, Inc. CaliforniaTalon Innovations Corporations MinnesotaTalon Innovations (FL) Corporation Florida Exhibit 23.1Consent of Independent Registered Public Accounting FirmThe Board of DirectorsIchor Holdings, Ltd.:We consent to the incorporation by reference in the registration statements (No. 333‑215984 and No. 333‑219846) on Form S‑8 of Ichor Holdings, Ltd. andsubsidiaries (the Company) of our report dated March 13, 2018, with respect to the consolidated balance sheets of Ichor Holdings, Ltd. and subsidiaries as ofDecember 29, 2017 and December 30, 2016, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the yearsin the three-year period ended December 29, 2017, and the related notes (collectively, the consolidated financial statements), which report appears in theDecember 29, 2017 annual report on Form 10‑K of the Company./s/ KPMG LLPPortland, OregonMarch 13, 2018 Exhibit 31.1CEO CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Thomas M. Rohrs, certify that:1.I have reviewed this annual report on Form 10-K of Ichor Holdings, Ltd.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f))for the registrant and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; (b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; (c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recentfiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controlover financial reporting. Date: March 13, 2018 By:/s/ Thomas M. Rohrs Thomas M. Rohrs Chief Executive Officer  Exhibit 31.2CFO CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Jeffrey S. Andreson, certify that:1.I have reviewed this annual report on Form 10-K of Ichor Holdings, Ltd.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f))for the registrant and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; (b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; (c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recentfiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controlover financial reporting. Date: March 13, 2018 By:/s/ Jeffrey S. Andreson Jeffrey S. Andreson Chief Financial Officer  Exhibit 32.1CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Ichor Holdings, Ltd. (the “Company”) on Form 10-K for the period ending December 29, 2017 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I certify, to my knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to§ 906 of the Sarbanes‑Oxley Act of 2002, that: (1)The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended;and (2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of theCompany. Date: March 13, 2018 By:/s/ Thomas M. Rohrs Thomas M. Rohrs Chief Executive Officer  Exhibit 32.2CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Ichor Holdings, Ltd. (the “Company”) on Form 10-K for the period ending December 29, 2017 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I certify, to my knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to§ 906 of the Sarbanes‑Oxley Act of 2002, that: (1)The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended;and (2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of theCompany. Date: March 13, 2018 By:/s/ Jeffrey S. Andreson Jeffrey S. Andreson Chief Financial Officer 

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